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What would be the net impact on franklin corp

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Reference no: EM132608331

Franklin Corp. (a U.S.-based company) sold inventory to a Canadian company on December 15, 2019, with payment of 10,000 CAD to be received on January 15, 2020. The following exchange rates applied:

Date                                Spot rate                   Forward Rate

(to Jan 15, 2020)

December 15, 2019           $0.90                         $0.98

December 31, 2019           $0.92                         $0.93

January 15, 2020                $0.95                          N/A

Problem 1: Assuming a forward contract was not entered into, what would be the net impact on Franklin Corp.'s 2019 income statement related to this transaction?

Option 1: $ 500 (gain)

Option 2: $ 500 (loss)

Option 3: $ 200 (gain).

Option 4: $ 200 (loss).

Option 5:  $ - 0 -

Reference no: EM132608331

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