Question

Last year Leather Boot, Inc. had investments in Paris worth 440,000 euros. At that time, the euro was worth $1.12. Today the euro is trading for $1.32. What is the gain or loss in value of the inventory expressed in dollars and in euros? Use a minus sign to enter the amount as a negative value. Round your answers to the nearest whole number. If your answer is zero, enter "0".

Answer 1

• $88,000 gain in dollars
• €0 gain (loss) in Euros

Step-by-step explanation:

Last year, the value of the inventory in dollars was;

= 440,000 * 1.12

= $‭492,800‬

This year with the new exchange rate this value has gone to;

= 440,000 * 1.32

= $580,800‬

The Gain (loss) in dollars is;

= Current value - Last year value

= 580,800‬ - 492,800

= $88,000

The value of the Euro both last year and this year is still €440,000 so the change is gain is €0.