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?
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?
Chapter25: Taxation Of International Transactions
Section: Chapter Questions
Problem 25P
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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 | |
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How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement?
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How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?
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