1. ABC purchased a machine on 31/10/20X0 for 13.000 in cash. The useful life was estimated to 5 years and the salvage value to 1.000. The machine started its operations immediately. On 30/4/20X2 the machine ceased operations and was sold for 9.000 in cash. Required: Conclude about the outcome of the sale (gain or loss) if: (a) The company follows the straight line method of depreciation. (b) The company follows the sum of year digits method of depreciation. Notes: You do not have to make the journal entries but present your calculations. Depreciation rate - Straight line method: d = 1/n Depreciation rate - Sum of year digits method: d= (k+1)/[n(n+1)/2] 2. Two firms, Firm A and Firm B, present the following data in their Income Statements: Income Statement (in simplified form) Sales Revenue CGS Gross Profit SGA Expenses Operating Income Financial Income Non-Operating Income Income Before Taxes 1/1-31/12/2021 1/1-31/12/2021 Firm A Firm B 300,000 300,000 -180,000 -100,000 120,000 200,000 -20,000 -180,000 100,000 20,000 0 0 0 80,000 100,000 100,000 Comment on the income statement items for both firms. What are potential weaknesses of each firm's performance? Which firm would be your investment choice?