Question 1Marko Polo Ltd is an importer of stationery, the business sells these items to a wholesaler for cashand to its retailers using the terms of an instalment credit agreement. The instalment creditagreement makes provision for the payment of a 25% deposit and the balance, which is inclusive offinance charges, over an 18-month period.The following financial information relates to the company's debtors with regard to their instalmentagreementsCurrentPreviousyearyearDebtors' balances at 28/29 February - sales (excluding financecharges320 000360 000Doubtful debts (included in the above amounts)debtors (excluding finance charges)80 00040 000finance charges accrued in terms of section24J64 00032 00040%40%Gross profit percentageThe companys taxable income for the previous year of assessmentR124 000The companys taxable income for the current year of assessmentR318 000These amounts are prior to takong into account any of the adjustments made in respect of debtorsYou are required to calculate Marko Polo Ltd.'s taxable income for the previous and current years of assessment.

Doubtful and bad debts Such debts are not collectible and are worthless for the company. A company…

Answered: Marko Polo Ltd is an importer of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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