On November 1,2017,American Company Sold Inventory to a Foreign Customer

Multiple Choice

On November 1,2017,American Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of $450,000 foreign currency units (FCU) .On November 1,American also entered into a forward contract to hedge the exposed asset.The forward rate is $0.70 per unit of foreign currency.American has a December 31 fiscal year-end.Spot rates on relevant dates were: What will be the adjusted balance in the Accounts Receivable account on December 31,and how much gain or loss was recorded as a result of the adjustment?

A) Receivable Balance,$319,500; Gain/Loss Recorded,$9,000 gain
B) Receivable Balance,$319,500; Gain/Loss Recorded,$9,000 loss
C) Receivable Balance,$333,000; Gain/Loss Recorded,$4,500 gain
D) Receivable Balance,$333,000; Gain/Loss Recorded,$18,000 gain