Question

Lowell Inc. had a receivable from a foreign customer that is due in the local currency of the customer (stickles). On December 31, 2021, this receivable for §200,000 was correctly included in Lowell’s balance sheet at $167,000. When the receivable was collected on February 15, 2022, the U.S. dollar equivalent was $181,000. In Lowell's 2022 consolidated income statement, how much should have been reported as a foreign exchange gain?

Answer 1

the amount reported as a foreign exchange gain is $14,000

Step-by-step explanation:

The computation of the amount reported as a foreign exchange gain is shown below;

= receivables as on Feb 15 2022 - receivable as on December 31 2021

= $181,000 - $167,000

= $14,000

hence, the amount reported as a foreign exchange gain is $14,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered