Teal, Inc., a foreign corporation, pays a dividend to its shareholders on November 30. Red, Inc., a U.S. corporation and 7% shareholder in Teal, receives a dividend of 10,000K (a foreign currency). Pertinent exchange rates are as follows:
|
November 30 |
.9K:$1 |
|
Average for year |
.7K:$1 |
|
December 31 |
2K:$1 |
What is the dollar amount of the dividend received by Red, Inc.? Does Red, Inc., have a foreign exchange gain or loss on receipt of the dividend?