Don't need to write the exact data.

a) What are the journal entries b) What are the impacts on the P&L or balance sheet c) Which of the below ratios will be affected and how

o Gross Profit Margin o Operating Profit Margin o Net Profit Margin o Interest Cover o Current Ratio o Account Receivables Days-on-hand o Inventory Days-on-hand o Account Payables Days-on-hand o Bank debt leverage o Leverage

1. The company spent a substantial amount of cash on promotion and advertising expenses.

2. To maintain market share, the company cuts its selling price and extends its credit terms (funded by Short Term bank loan). Journal entry for sales.

3. The companys key supplier shortened the credit terms (funded by Short Term bank loan). Journal entry for purchase.

4. The company has a huge expansion plan with a big CAPEX amount to be funded by short term bank borrowing. Journal entry for purchase of fixed asset. Year-end journal entry for fixed asset.