How much is the accounting gain/loss due to the exchange rate change?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
ChapterP2: Part 2: Exchange Rate Behavior
Section: Chapter Questions
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The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange rate at the beginning of the year was $1 Euro = $1 U.S. dollar. The current exchange rate is .80 Euros to $1.00. Net Income for the year was zero. How much is the accounting gain/loss due to the exchange rate change?

Beginning Balance Sheet:

  • Assets = 3,000 Euros
  • Equity = 1,500 Euros
  • Liabilities = 1,500 Euros  
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