2020 The summarized accounts of Moon Hotel Ltd for the years ended 31 December 2020 and 2021 are as follows: Income Statement for the year ended 31 December 2021 $ $ Sales (note 1) 2,400,000 2,000,000 Cost of goods sold (note 2) 1,440,000 1,100,000 Gross profit 960,000 900,000 Less: Expenses Debenture interest 27,280 21,560 Other operating expenses 618,000 500,000 645,280 521,560 Profit before tax 314,720 378,440 Income tax (78,000) (92,000) Profit for the year 236,720 286,440 Statements of Financial Position as at 31 December 2020 2021 $ 1,354,100 1,450,900 Assets Fixed assets (net) Current assets Inventories Accounts receivable Bank 310,200 189,200 291,500 213,400 18,920 523,820 920 Total Assets 499,400 1,950,300 341,000 269,500 Liabilities Non-current liabilities 8% Debentures 2024 Current liabilities Accounts payable Accrued expenses Provision for taxation Bank overdraft 261,800 29,800 78,000 223,300 31,200 92,000 8,800 355,300 624,800 369,600 710,600 Total Liabilities Shareholders' Equity Share capital Reserves 500,000 667,320 1,167,320 550,000 775,500 1,325,500 Total Liabilities and Shareholders' Equity 1,877,920 1,950,300 3 Notes: (1) The sales figure includes cash sales as follows: 2020 2021 $ $ Cash sales 450,000 400,000 (2) The company bought all the goods on credit. *Hints: The amount of credit purchases' can be derived by applying the formula for calculating cost of goods sold'. You may need to refer to for getting the amount of the opening inventory' for 2020 ("closing inventory' for 2019). Opening inventory Add: Purchases (credit) ? Less: Closing inventory Cost of goods sold (x) Required: The Director of Finance would like to compare the financial performance of the hotel company over the two years 2020 and 2021. You are required to submit a financial report to the Director of Finance. In the report, you have to comment on the performance (and if possible, give recommendations for further improvement) of Moon Hotel Ltd in 2021 as compared to 2020 terms of the following aspects based on the above information and relevant accounting ratios: Profitability Short-term liquidity Long-term solvency Note: All calculations should be rounded to 1 decimal place Calculations (33 marks) Comments and recommendations (37 marks)