Given Only the Following Information,how Much Revenue Would L Ltd

question 9

Multiple Choice

Given only the following information,how much revenue would L Ltd recognise in May 2012?
(i) A $160 000 deposit was received from a client in May for work to be carried out in June.
(ii) Credit sales of $300 000 made in May,with only $100 000 to be collected in May.
(iii) $40 000 was collected in May from customers for April sales.
(iv) Sold goods were valued at $60 000 on last day of May.Client to be invoiced in early June.
(v) A contract was signed to deliver client goods valued at $80 000 in June.

• A) $260 000
• B) $360 000
• C) $400 000
• D) $160 000.

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Definitions:

Instantaneous Risk-free Rate

The theoretical rate of return of an investment with no risk of financial loss, typically considered as a very short-term government bond yield.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged.

Strike Price

The price at which the holder of an option contract has the right to buy or sell the underlying asset.

Underlying Stock

The stock on which a derivative instrument, such as an option or future, is based.