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On October 25, 2020, a U.S. company sold merchandise on credit to a customer in Spain...

On October 25, 2020, a U.S. company sold merchandise on credit to a customer in Spain at an invoice price of €1,000, when the exchange rate was $1.25/€. On December 31, 2020, the U.S. company’s year-end, the exchange rate was $1.257/€. On February 1, 2021, when the exchange rate was €1.23, the U.S. company received €1,000 in payment for the merchandise.

The U.S. company’s exchange gain or loss for 2021 is

Question 42 options:

a)

$20 loss

b)

$27 loss

c)

$20 gain

d)

$7 gain
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