Answer ALL questions below. Question 1 Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018. The machinery is estimated to be used for 5 years. After exactly 3 years, however, the machinery is suddenly sold for RM5,000. Sejati Bhd always provide a full year's depreciation in the year when assets are purchased and no depreciation in the year when assets are disposed. Required: Prepare the accumulated depreciation for machinery accounts and machinery disposal accounts for years 2018, 2019 and 2020: a. Using the straight-line depreciation method (assume 20% p.a.). b. (7 marks) Using the reducing balance depreciation method (assume 40% p.a.). (8 marks) Question 2 Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: Statements of Comprehensive Income RM Company A RM Company B RM RM Sales 160,000 240,000 Cost of sales (120,000) (180,000) Gross profit 40,000 60,000 Less: Administration expenses 12,000 18,000 Selling and distribution expenses 6,000 9,500 Other operating expenses 10,000 14,000 Financial expenses 3,000 500 (31,000) (42,000) Net profit 9.000 18,000 ...3/- Company A Company B RM RM BM RM Statements of Financial Position Non-current Assets 80,000 180,000 Current Assets Inventory 30,000 50,000 Receivables 6,000 20,000 Bank 4,000 10,000 40,000 80,000 Total Asset 120,000 260,000 Capital and reserves Ordinary share capital 60,000 160,000 Accumulated profits 20,000 75,000 80,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 120,000 20,000 260,000 Required: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: . Gross Profit Margin ii. Net Profit Margin III. iv. V. Inventory Turnover Period (days) Receivables Collection Period (days) Payables Payment Period (days) vi. Current Ratio vii. Quick Ratio (8 marks) b. Comment on each of the ratios calculated in part (a) above. (7 marks)