Answer ALL questions in this section.

$1.$ Explain the concept of fair value accounting and discuss its advantages and disadvantages in

financial reporting. $(6$ marks$)$

$2.$ Explain possible reasons for the following:

a$.$ A decrease of gross profit from $30\%$ to $22\%$ at a bakery. $(6$ marks$)$

b$.$ An increase in Return on Capital Employed from $11\%$ to $16\%$ at a detergent

manufacturing firm. $(6$ marks$)$

c$.$ A gross profit margin of $55$ and a net profit margin of $45\%.(6$ marks$)$

$3.$ Discuss how differences between a private limited company and a public limited company

can impact decision$-$making, financial obligations, and the overall operational flexibility of

each business structure. $(6$ marks$)$