Exact Instruments sold equipment to a British research group at a price of 70,000 British pounds on December 1, 2014 with payment due in 90 days
Using the following exchange rates, what gain or loss from currency fluctuations should be recognized in 2014 and 2015, respectively?
A. A $2,800 loss in 2014 and a $3,500 gain in 2015.
B. No gain or loss in 2014 and a $700 loss in 2015.
C. A $2,800 gain in 2014 and a $3,500 loss in 2015.
D. No gain or loss in 2014 and a $700 gain in 2015.
C
(?70,000 × $1.78) - (?70,000 × $1.82) = $2,800 gain in 2014
(?70,000 × $1.77) - (?70,000 × $1.82) = $3,500 loss in 2015
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