Honk, Inc., a U.S. corporation, purchases weight-lifting equipment for resale from HiDisu, a Japanese corporation, for 60 million yen. On the date of purchase, 105 yen is equal to $1 U.S. (¥105:$1). The purchase is made on December 15, 2016, with payment due in 90 days. Honk is a calendar year taxpayer. On December 31, 2016, the foreign exchange rate is ¥108:$1.
On February 2, 2017, the invoice is paid when the exchange rate is ¥111:$1. What amount of foreign currency gain or loss, if any, must Honk recognize for 2016 as a result of this transaction? For 2017?
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com