What is the effect of exchange rate changes

Reference no: EM133633032

Question: On May 20, 2022, when the spot rate is $1.14/€, a U.S. company buys merchandise from a supplier in Italy, at a cost of € 60,000. The spot rate is $1.11/€ on June 30, the company's year-end. Payment of € 60,000 is made on July 30, 2022, when the spot rate is $1.18/€. The company sells the merchandise to a U.S. customer for $90,000 in August of 2022.

What is the effect of exchange rate changes on fiscal 2022 and fiscal 2023 income?

Reference no: EM133633032

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