On December 20, 2011, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2012. Currency exchange rates for 1 ostra are as follows:
December 20, 2011 | $1.05 |
December 31, 2011 | 1.02 |
January 10, 2012 | 0.98 |
a. How does the fluctuation in exchange rates affect Butanta's 2011 income statement?
b. How does the fluctuation in exchange rates affect Butanta's 2012 income statement?
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