Assuming that Brandt did not hedge its foreign exchange risk, how much foreign exchange gain or loss

Question:

Assuming that Brandt did not hedge its foreign exchange risk, how much foreign exchange gain or loss should it report on its 2020 income statement with regard to this transaction?

a. $5,000 gain

b. $3,000 gain

c. $2,000 loss

d. $1,000 loss

Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with payment of 10 million South Korean won to be received on March 31, 2021. The following exchange rates apply:

Forward Rate Date Spot Rate (to March 31, 2021) December 1, 2020 $0.0035 $0.0034 December 31, 2020 0.0033 0.0032 March 31, 2021 0.0038 N/A