On October 15, 20X5, Ibis Corporation, a French company, ordered merchandise listed on the Internet for 20,000 Euros from Spoonbill Corporation, a US corporation, which immediately accepted the
On October 15, 20X5, Ibis Corporation, a French company, ordered merchandise listed on the Internet for 20,000 Euros from Spoonbill Corporation, a US corporation, which immediately accepted the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On October 15, 20X5, Ibis Corporation, a French company, ordered merchandise listed on the
Internet for 20,000 Euros from Spoonbill Corporation, a US corporation, which immediately
accepted the order. The Euro rate was $1.20 US on October 15. On November 15, 20X5
Spoonbill shipped the goods and billed Ibis the purchase price of 20,000 Euros when the Euro
rate was $1.30 US. Ibis paid the bill on December 10, 20X5. Three days later Spoonbill
exchanged the 20,000 Euros for US dollars when the Euro rate was $1.28US.
Required:
Compute the foreign currency gains or losses on the December 31, 20X5 financial statements
and show your calculations.
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