Question

Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local currency. On December 31, 2017, Brief correctly included this receivable for 255,000 local currency units (LCU) in its balance sheet at $165,000. When Brief collected the receivable on February 15, 2018, the U.S. dollar equivalent was $177,900. In Brief's 2018 consolidated income statement, how much should it report as a foreign exchange gain

Answer 1

$12,900

Step-by-step explanation:

Calculation for how much should it report as a foreign exchange gain

Using this formula

Foreign exchange gain=U.S. dollar equivalent- Local currency units (LCU)

Let plug in the formula

Foreign exchange gain=$177,900-$165,000

Foreign exchange gain=$12,900

Therefore the amount that should be reported as a foreign exchange gain will be $12,900

local currency units (LCU) in its balance sheet at $165,000. When Brief collected the receivable on February 15, 2018, the U.S. dollar equivalent was $177,900. In Brief's 2018 consolidated income statement, how much should it report as a foreign exchange gain