Suppose Pickel Corp. completed the following transactions:

2014 Dec. 4 Sold product on account to a Mexican company for $110,000. The exchange rate of the Mexican peso was $0.078, and the customer agreed to pay in Canadian dollars.

13 Purchased inventory on account from a U.S. company at a price of US$240,000. The exchange rate of the U.S. dollar was $1.05, and payment will be in U.S. dollars.

20 Sold goods on account to an English firm for 180,000 British pounds. Payment will be in pounds, and the exchange rate of the pound was $1.66.

27 Collected from the Mexican company. The exchange rate of the Mexican peso was $0.075.

31 Adjusted the accounts for changes in foreign-currency exchange rates. Current rates: U.S. dollar, $1.07; British pound, $1.65.

2015 Jan. 21 Paid the American company. The exchange rate of the U.S. dollar was $1.06.

Feb. 17 Collected from the English firm. The exchange rate of the British pound was $1.69.

Required

1. Record these transactions in Pickel Corp.'s general journal, and show how to report the transaction gain or loss on the income statement for the year ended December 31, 2014.

2. How will what you have learned in this problem help you structure international transactions?