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Recently, Claries Clothing Inc. (CCI), a Canadian company, received an order to sell to a...

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Accounting

Recently, Claries Clothing Inc. (CCI), a Canadian company, received an order to sell to a new customer in the United States. The invoice is for US$300,000. The customer has agreed to pay on October 15, 20X6, two months from the date of sale and shipment. It is now the date of sale and shipment, and the exchange rate is US$1 = C$1.20. The company has taken no action to offset its foreign exchange risk at this point. Which of the following statements BEST describes possible outcomes related to this sale? Question 5 options: a) If the customer pays the invoice immediately, at the date of sale, there is foreign exchange risk associated with the amount of the sale and an exchange gain of $60,000 is recorded [$300,000 ($1.00 $1.20)]. b) If CCI enters into a forward contract on the date of sale and shipment, based on a two-month forward rate of US$1 = C$1.23, CCI will record an exchange loss of $9,000 on the date the customer pays. c) If the customer pays in two months, and if the exchange rate is US$1 = C$1.25 at that time, CCI will realize an exchange loss of $15,000. d) If the customer pays in two months, and if the exchange rate is US$1 = C$1.25 at that time, CCI will realize an exchange gain of $15,000.

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