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Angelas Artwork Inc. (Angelas) recently entered into a contract to supply artwork to a U.S. company. The controller of Angelas is not experienced with translation of foreign currency transactions and has made the following entries to record sales to the U.S. company without factoring in the impact of foreign currency on the transactions: To record sales in USD dollars: DR Accounts receivable $156,000 CR Sales $156,000 To record the collection of a portion of the receivable: DR Cash (USD) $90,000 CR Accounts receivable $90,000 To record the conversion of a portion of USD cash to CDN cash: DR Cash (CDN) $78,000 CR Sales $18,000 CR Cash (USD) $60,000 Sales were made evenly over a period when the exchange rate was US$1.00 = C$1.33, and the exchange rate at the end of the fiscal year was US$1.00 = C$1.25. The foreign exchange gain or loss to be reported on these transactions is determined as follows: Question 2 options: a) By comparing translated year-end receivables to translated sales b) By comparing the sum of Canadian cash, translated year-end receivables, and translated U.S. cash to translated sales c) By comparing the sum of translated year-end receivables and translated U.S. cash to translated sales. d) There would be no foreign exchange gain or loss because the difference is an adjustment to sales

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