Mortimer Limited Has the Following Items in Its Statement of Profit

question 3

Multiple Choice

Mortimer Limited has the following items in its statement of profit or loss and other comprehensive income: Revenue FC60 000,
Cost of goods sold FC25 000,
Interest expense FC8 000,
Income tax expense FC10 000.
All items arose evenly across the year. The following exchange rates applied:
$\begin{array}{lll}\text { End of reporting period } & F C 1= & \$ 0.80 \\\text { Average rate for year } & F C 1= & \$ 0.75\end{array}$
The net profit after tax translated into the presentation currency is:

• A) $12 750;
• B) $13 600;
• C) $21 250;
• D) $26 667.

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Definitions:

Credit Policy

A set of guidelines that a company follows to determine the credit terms for its customers, which can influence its accounts receivable and sales.

State Of The Economy

A description of the current economic conditions and indicators such as GDP, unemployment rate, and inflation.

Cost Of Credit

The total amount of interest and other charges a borrower pays over the life of a loan, expressed as a rate of the principal sum borrowed.

Credit Terms

Credit terms are the conditions under which a seller extends credit to a buyer, detailing the repayment period, interest rate, and the consequences of late payment.