Butler Manufacturing, Inc., a calendar year domestic corporation, operates a branch in Ireland. In the current year,

Question:

Butler Manufacturing, Inc., a calendar year domestic corporation, operates a branch in Ireland. In the current year, the branch generated 750,000 euros in net profit. On December 31 of the current year, one euro equaled $1.35. The average exchange rate for the current year between the euro and the dollar was $1.25. Write a memo to Margaret Zhang, the controller of Butler, explaining (1) how and when the Irish profits will be taxed to Butler in the United States and (2) under what conditions a foreign currency gain or loss will be recognized.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...