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:
End of reporting period FC1 = $0.80
Average rate for year FC1 = $0.75
The net profit after tax translated into the presentation currency is:
A) $12 750;
B) $13 600;
C) $21 250;
D) $26 667.

Question

Quizplus · Accepted Answer

Net profit after tax = Revenue - Cost of goods sold - Interest expense - Income tax expense= FC60 000 - FC25 000 - FC8 000 - FC10 000= FC17 000Translated into the presentation currency:= FC17 000 x $0.75= $12 750

Mortimer Limited Has the Following Items in Its Statement of Profit