Answer all questions in this paper. QUESTION 1 REQUIRED [100 MARKS] (20 Marks) Use the information provided below to answer the following questions: 1.1 Provide a possible reason why the amount for interest expense in the Statement of Comprehensive Income is zero. (2) 1.2 Calculate the depreciation for the year ended 31 December 2021. (2) 1.3 Calculate the amount that would appear in the cash flow statement for the year ended 31 December 2021 for "Profit before working capital changes". 1.4 Suggest FOUR (4) control measures that you would put in place to reduce the chances of embezzlement of cash by the employees. (2) (4) 1.5 What will be the impact on the value of inventory (in the Statement of Financial Position) and the cost of goods sold (in the Statement of Comprehensive Income) if the last-in-first-out (LIFO) method rather than the first-in-first-out (FIFO) method is used during periods of inflation? (4) 1.6 Explain THREE (3) implications of a high earnings retention ratio to the shareholders of Mobifone Limited. (6) INFORMATION The following information was extracted from the accounting records of Mobifone Limited on 31 December 2021, the end of the financial year: MOBIFONE LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 ASSETS Non-current assets Fixed/Tangible assets Investments Current assets Inventories Accounts receivable Cash Total assets EQUITY AND LIABILITIES R 1 700 000 1 500 000 200 000 5 300 000 3 400 000 1 600 000 300 000 7 000 000 Equity 3 200 000 Share capital 2 300 000 Retained earnings Non-current liabilities 900 000 1 600 000 Loan: KLM Bank (15%) 1 600 000 Current liabilities 2 200 000 Accounts payable 2 200 000 Total equity and liabilities 7 000 000