BSBFIM501 Question 7, all the necessary information has been stated in the screenshots below for this question!

Case Study Scenario: Perfect Plants Pty Ltd You are a team leader at Perfect Plants Pty Ltd who is a wholesale plant nursery based in the western suburbs of Sydney. As well as the wholesale business which includes a propagation facility where a select number of specialist varieties of orchids are grown, the business operates a retail shop. The following financial statements for 2019/20 financial year are provided. Use this information and further research to answer questions 7 and 8 below. Perfect Plants Pty Ltd Perfect Plants Pty Ltd Profit and Loss Statement Balance Sheet as at 30/6/20 For the year ended 30/6/209 $ $ $ $ Revenue Assets Retail Cash Sales 1,050,000 Current Assets Wholesale Credit Cash at Bank 200,000 Sales 5,450,000 Debtors 350,000 Interest Received 10,000 Inventory 550,000 1,100,000 6,510,000 Non-Current Assets 5,000,000 Less Cost of Sales Land and Buildings Equipment 1,000,000 Cost of Goods Sold 3,350,000 Vehicles 3,350,000 750,000 6,750,000 7,850,000 Gross Profit Total Assets 3,160,000 Less Expenses Admin & IT Liabilities 250,000 Current Liabilities Salary and Wages 1,055,000 Creditors 915,000 Superannuation 100,225 GST Payable 50,000 965,000 Interest Paid 200,000 Non-Current Bad Debts 100,000 Liabilities Depreciation 150,000 Loan XYZ Bank 4,000,000 Other Operating Total Liabilities 4,965,000 634,775 Expenses Total Expenses 2,240,000 Net Assets 2,885,000 Net Profit Before Tax 920,000 Respresented by Shareholder's Equity: Income Tax Expense 201,000 Capital 2,766,000 Net Profit After Tax 469,000 Add: Current year 469,000 profit 3,235,000 Less: Dividend paid 350,000 Total Shareholder's Equity 2,885,000 Question 7 - Accounting principles Does Perfect Plants Pty Ltd use the Cash or Accrual accounting method? Explain how you can tell this from looking at the financial statements. Is the method appropriate given the business operations/type of legal structure? Provide a reference to support your response. Your response should be approximately 50 words