Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 230 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 368,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date U.S. Dollar per Brazilian Real (BRL) September 1, 2020 $ 0.240 December 1, 2020 0.230 December 31, 2020 0.250 March 1, 2021 0.235 Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and in 2021?

Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 230 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 368,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: U.S. Dollar per Brazilian Real (BRL) $0.240 0.230 0.250 0.235 Date September 1, 2020 December 1, 2020 December 31, 2020 March 1, 2021 a. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? b. Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? c. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and in 2021? (Input all amounts as positive values.) Answer is complete but not entirely correct. Effect of Exchange Rate Fluctuations Gain 80,640 a. 2020 b. 2020 Loss $ 7,040 2021 Gain $ 7,200 C. 2020 Loss $ 2,400 X 2021 Gain $ 4,800