Question: 1. JP sells goods to a Spanish customer at a price of 1 million euros. JP shipped good to its customer on December 10, Year1. The payment was received on March 1, Year2.
Date Spot rate Forward rate
12/10/Year1 $1.50 $1.53
12/31/Year1 $1.51 $1.46
3/1/Year2 $1.48 $1.45
1. What amount should be reported as foreign exchange gain (or loss) on the Year 1 Income Statement?
2. What amount should be reported as foreign exchange gain (or loss) on the Year 2 Income Statement?