(Answered) Rabato corporation acquired merchandise on account from a

Finance

Rabato Corporation acquired merchandise on account from a foreign supplier on November 1, 2011, for 60,000 LCU (local currency units). It paid the foreign currency account payable on January 15, 2012. The following exchange rates for 1 LCU are known:

1-Nov-11	$0.35
31-Dec-11	0.333
15-Jan-12	0.359

a. How does the fluctuation in exchange rates affect Rabato's 2011 income statement?

b. How does the fluctuation in exchange rates affect Rabato's 2012 income statement?

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