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What amount would the company recognize as a gain

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Question - On November 25, Year 1, smith inc. a US company sold merchandise on account to a European company for 5000 euros. At that time, $0.75. On December 31, Year 1, one euro could purchase $1.35. On January 25, year 2, when payment was Ade, $1 could purchase 0.85 euros. What amount would the company recognize as a gain or loss from foreign currency transactions when the receivable was collected?

1. 1250 gain

2. 750 loss

3. 850 loss

4. 0

Reference no: EM133179388

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