Explain what the company located in the United States

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Question - A company located in the United States sells a portion of its inventory on November 23, year one, to a company in Japan on credit. The transaction was denominated in Japanese yen, an amount that is not paid before the end of the current year. The US company is preparing financial statements at the end of the first year and company officials are concerned about the method by which these balances will be reported in US dollar terms. The 100,000 yen is received on January 10, year two, which is before the financial statements for year one are released. On November 23, year one, one US dollar was worth 125 yen. At the end of the year, one US dollar was worth 100 yen. As of January 10, year two, one US dollar is worth 80 yen. Explain what the company located in the United States must report in the company's Income Statement.

Reference no: EM132925309

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