Please answer a) and b). Thank You,

QUESTION 4 Presented below are the financial statements of Ellisa Berhad. Comparative Balance sheets 2016 RM RM Assets Land Motor vehicles Accumulated depreciation-Motor vehicles Inventory Account receivable Prepaid rent Cash Bank Total Assets 73,000100,000 260,000 200,000 (66,000) (34,000) 170,000 187,000 70,00062,000 9,000 50,000 25,000 8,000 595,000 557,000 15,000 23,000 Liability and Equity Account payable Salaries payable Utilities payable Bond payable Common stock Retained earnings Total Liability and Equity 30,000 40,000 5,000 2,000 150,000200,000 216,000 174,000 194,000136,000 595,000557,000 4,000 1,000 Additional information: 1. Net income for 2016 was RM103,000. Net sales for the year were RM780,000 2. Depreciation expense and bad debts expense were RM22,000 and RM10,000, respectively 3. No motor vehicles was sold during 2016 4. Land was sold for its book value of RM27,000 5. Bond payable amounting to RM50,000 were redeemed for cash RM50,000 6. Common stocks were issued for RM42,000 cash. 7. Dividend of RM60,000 was declared and RM45,000 have been paid during the year Required: a) Prepare the statement of cash flows for 2016 using indirect method. b) Compute the following profitability ratios for 2016 (19 marks) (i)Return on assets. (ii) Profit margin. (3 marks) (3 marks) (Total: 25 marks) End of Page