Import Export Company a U S company made a number of

import
Import/Export Company, a U.S. company, made a number of import purchases and export
sales denominated in foreign currency in 2015. Information related to these transactions is
summarized in the following table. The company made each purchase or sale on the date in the
Transaction Date column and made payment in foreign currency or received payment on the
date in the Settlement Date column.

Required
1. Create an electronic spreadsheet with the information from the preceding table. Label
columns as follows:
Foreign Currency
Type of Transaction
Amount in Foreign Currency
Transaction Date
Exchange Rate at Transaction Date
$ Value at Transaction Date
Settlement Date
Exchange Rate at Settlement Date
$ Value at Settlement Date
Foreign Exchange Gain (Loss)
2. Use historical exchange rate information available on the Internet at www.x-rates.com,
Historic
Lookup, to find the 2015 exchange rates between the U.S. dollar and each foreign currency on
the relevant transaction and settlement dates.
3. Complete the electronic spreadsheet to determine the foreign exchange gain (loss) on each
transaction. Determine the total net foreign exchange gain (loss) reported in Import/Export
Company's 2015 income statement.
4. Explain why a foreign exchange gain arises for some transactions and a foreign exchange
loss occurs for other transactions.

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