Accounting for foreign currency–denominated sales settled in subsequent year
On November 16, 2011, Wick Corporation of the United States sold inventory items to Candle Ltd. of Canada for 90,000 Canadian dollars, to be paid on February 14, 2012. Exchange rates for Canadian dollars on selected dates are as follows:
|
November 16, 2011 |
$0.80 |
|
December 31, 2011 |
$0.84 |
|
February 14, 2012 |
$0.83 |
REQUIRED: Determine the exchange gain or loss on the sale to Candle Ltd. to be included in Wick’s income statement for the years 2011 and 2012.