On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows: December 20, 2017 $1.05December 31, 2017 1.02January 10, 2018 0.98a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?
On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows: December 20, 2017 $1.05December 31, 2017 1.02January 10, 2018 0.98a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold
parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018.
Currency exchange rates for 1 ostra are as follows:
December 20, 2017 $1.05
December 31, 2017 1.02
January 10, 2018 0.98
a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?
b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?
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