On September 1, year 1, Cano & Co., a US corporation, sold
merchandise to a foreign firm for 250,000 Botswana pula. Terms
of the sale require payment in pula on February 1, year 2. On
September 1, year 1, the spot exchange rate was $.20 per pula. At
December 31, year 1, Cano’s year-end, the spot rate was $.19, but
the rate increased to $.22 by February 1, year 2, when payment
was received. How much should Cano report as foreign exchange
transaction gain or loss as part of year 2 income?