QUESTION 2 (25 MARKS) 2 a. SACT Corp. has sales of RM5,000,000. The firm's cost of goods sold is RM3,000,000; and its total operating expenses are RM600,000. The firm's interest expense is RM300,000, and the corporate tax rate is 40%. Calculate SACT's tax liability. (8 marks) b. Given the following information. You are required to prepare the company's operations cash flow. Increase in account receivable Increase in inventories Increase in account payable Dividends Increase in common stocks Increase in net fixed assets Depreciation expense Net income RM 20 25 25 15 20 23 12 40 CONFIDENTIAL/2 FBA/PFS1313/APRIL21 ii. Beginning cash 20 Ending cash 5 (7 marks) c. Penjana Berhad has total assets of RM100 million, current liabilities of RM5 million, long term debt of RM50 million and total equity of RM45 million. The company also has operating expenses of RM32 million with interest expenses of RM9 million Based on the information above, calculate: i. Calculate debt ratio. (2 marks) Calculate time interest earned. (2 marks) d. Setia Sdn. Bhd. has a gross profit margin of 25% and sales of RM19,500,000 for the recent financial year. 75% of the firm sales are on credit and the remainders are on cash terms. Setia Sdn. Bhd.'s current assets now stand at RM31,000,000, current liabilities RM660,000 account payable is RM 400,000 and cash in hand at RM320,000. i Account receivable is RM1,156,000, what is the firm day in account receivables. (2 marks) ii. Suppose you are told that the inventory turnover is 7 times. What is Setia Sdn. Bhd. level of stock? (4 marks)