How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement? How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter25: Taxation Of International Transactions
Section: Chapter Questions
Problem 25P
icon
Related questions
Question

Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2020, for 100,000 crowns. It paid the foreign currency account payable on January 15, 2021. The following exchange rates are relevant:

 

Date U.S. Dollar per Crown  
November 1, 2020 $ 0.754  
December 31, 2020 $ 0.742  
January 15, 2021 $ 0.747  
     

 

  1. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement?

  2. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Foreign Exchange Transactions
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
International Financial Management
International Financial Management
Finance
ISBN:
9780357130698
Author:
Madura
Publisher:
Cengage
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Financial Reporting, Financial Statement Analysis…
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning