A US Manufacturer Has Sold Computer Services to a Foreign Firm

Multiple Choice

A U.S. manufacturer has sold computer services to a foreign firm and received 200,000 foreign currency units (FCs) . The exchange rates were 1 FC = $.75 on the date of the sale and 1 FC = $.80 when the receivable was settled. On the transaction date, the settlement exchange rate is estimated to be 1 FC = $.72. By the settlement date, what is the total exchange gain or loss recorded for the transaction if the two-transaction method is used?

A) $10,000 exchange gain
B) $6,000 exchange loss
C) $10,000 exchange loss
D) no gain or loss