Barter Corp. sold American telecommunications equipment to a British company for

Question

Barter Corp. sold American telecommunications equipment to a British company for 590,000 pounds. On the sale date, the exchange rate was $1.65 per British pound, but when Barter received payment from its customer, the exchange rate was $1.60 per pound. When the foreign receivable was collected, Barter Enterprises: Multiple Choice Debited Loss on Fluctuation of Foreign Currency for $29,500 Credited Sales for $29,500. Debited Cash for $29,500. Credited Gain on Fluctuation of Foreign Currency for $29,500

Explanation / Answer

Ans: Debited loss on Fluctuation of foreign currency for $29500.

Explanation:

($590000 x $1.60) - ($590000 x $1.65) = $29500 loss

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