Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 39

Import/Export Company, a U.S. company, made a number of import purchases and export sales denominated in foreign currency in 2010. Information related to these transactions is summarized in the following table. The company made each purchase or sale on the date in the Transaction Date column and made payment in foreign currency or received payment on the date in the Settlement Date column.

Required
1. Create an electronic spreadsheet with the information from the preceding table. Label columns as follows:
Foreign Currency
Type of Transaction
Amount in Foreign Currency
Transaction Date
Exchange Rate at Transaction Date
$ Value at Transaction Date
Settlement Date
Exchange Rate at Settlement Date
$ Value at Settlement Date
Foreign Exchange Gain (Loss)
2. Use historical exchange rate information available on the Internet at www.x-rates.com, Historic Lookup, to find the 2010 exchange rates between the U.S. dollar and each foreign currency on the relevant transaction and settlement dates.
3. Complete the electronic spreadsheet to determine the foreign exchange gain (loss) on each transaction. Determine the total net foreign exchange gain (loss) reported in Import/Export Company's 2010 income statement.