Sales Denominated in Foreign Currency Swift Corporation sold products to a foreign company with the sales price stated in FCU (foreign currency units). The products were delivered on November 1, 2001, at an agreed-upon price of 400,000 FCU. Payment is to be received on March 1, 2002. Swift Corporation’s year-end is December 31, 2001.

Relevant exchange rates are as follows:

a. What sale price should Swift Corporation record at November 1, 2001?

b. What is the value of Swift's accounts receivable at December 31, 2001?

c. What amount of gain or loss on foreign currency transactions should Swift record at December 31, 2001?

d. What is the value of the payment received at March 1, 2002?

e. What amount of gain or loss on foreign currency transactions should Swift record at March 1, 2002?

f. Was Swift better off or worse off from having received payment on March 1, 2002, rather than on November 1, 2001? By what amount?

Transcribed Image Text:

November 1, 2001 December 31, 2001 March 1, 2002 1 FCU FCU 1 FCU = $3.00 U.S. $3.08 U.S. = $3.02 U.S.