Problem

Monroe Corporation imports merchandise from some Canadian companies and exports its own pr...

Monroe Corporation imports merchandise from some Canadian companies and exports its own products to other Canadian companies. The unadjusted accounts denominated in Canadian dollars at December 31, 2011, are as follows:

Account receivable from the sale of merchandise on December 16 to Carver Corporation. Billing is for 150,000 Canadian dollars and due January 15, 2012

$103,500

Account payable to Forest Corporation for merchandise received December 2 and payable on January 30, 2012. Billing is for 275,000 Canadian dollars.

$195,250

Exchange rates on selected dates are as follows:

December 31, 2011

$0.680

January 15, 2012

$0.675

January 30, 2012

$0.685

REQUIRED

1. Determine the net exchange gain or loss from the two transactions that will be included in Monroe’s income statement for 2011.


2. Determine the net exchange gain or loss from settlement of the two transactions that will be included in Monroe’s 2012 income statement.

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Solutions For Problems in Chapter 12