On December 1, 20x1, Entity A sells good to Entity B, on credit, for a total sale price of $1,000. Entity B settles the account on January 6, 20x1. Entity A's functional currency is the Philippine peso (P). The relevant exchange rate are as follows: Dec. 1, 20x1 Dec. 31, 20x1 Jan. 6. 20x1 P50:$1 P52:$1 P41:S1

On December 1, 20x1, Entity A sells good to Entity B, on credit, for a total sale price of $1,000. Entity B settles the account on January 6, 20x1. Entity A's functional currency is the Philippine peso (P). The relevant exchange rate are as follows: Dec. 1, 20x1 Dec. 31, 20x1 Jan. 6. 20x1 P50:$1 P52:$1 P41:S1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

How much is the foreign exchange gain (loss) to be recognized by Entity A on January 6, 20x2

On December 1, 20x1, Entity A sells good to Entity B, on credit, for a total sale price of $1,000.
Entity B settles the account on January 6, 20x1. Entity A's functional currency is the Philippine
peso (P). The relevant exchange rate are as follows:
Dec. 1, 20x1
Dec. 31, 20x1
Jan. 6, 20x1
P50:$1
P52:$1
P41:$1

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