Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 380 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 608,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date September 1, 2020 December 1, 2020 December 31, 2020. March 1, 2021 a b U.S. Dollar a. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? b. Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? n per Brazilian Real (BRL) c. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and in 2021? (Input all amounts as positive values.) 2020 2020 2021 2020 2021 $0.200 0.190 0.210 0.195 Effect of Exchange Rate Fluctuations
Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 380 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 608,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date September 1, 2020 December 1, 2020 December 31, 2020. March 1, 2021 a b U.S. Dollar a. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? b. Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? n per Brazilian Real (BRL) c. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and in 2021? (Input all amounts as positive values.) 2020 2020 2021 2020 2021 $0.200 0.190 0.210 0.195 Effect of Exchange Rate Fluctuations
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are
denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 380 surfboards at a price of BRL 1,600 per surfboard,
for a total of BRL 608,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows:
Date
September 1, 2020
December 1, 2020
December 31, 2020.
March 1, 2021
a
b
U.S.
Dollar
n
per
Brazilian
Real
(BRL)
a. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect
of the exchange rate fluctuations on reported income in 2020?
b. Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the
exchange rate fluctuations on reported income in 2020 and 2021?
2020
2020
2021
2020
2021
$0.200
0.190
c. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the
exchange rate fluctuations on reported income in 2020 and in 2021?
(Input all amounts as positive values.)
0.210
0.195
Effect of Exchange Rate Fluctuations
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