FINANCIAL ACCOUNTING Note: - Attempt all questions, all questions carry equal marks. Question No. 1: A) Nauman Afzal bought three motorcars during 2010 as follows Car XYZ, on 1 January for Rs.500,000 Car SDA, on 1 April for Rs.600,000 Car CVS, on 1 July for Rs.480,000 She closes her books on 30 September each year and provides 20% p.a depreciation on book value on all motorcars. On 1 October 2011 he sold car XYZ for Rs. 300,000. On 1 January 2012 she traded in car SDA, at Rs. 390000 for another car CVS that cost Rs.800,000, meeting the difference in cash. Show the motorcars account, depreciation expense account, provision for depreciation on motorcars and disposal of assets account, in her ledger, balanced each year on 30 September, till 30 September 2012 B) Why financial statements are prepared? Answer your question in light of agency theory of finance? How many methods of Depreciation are there and in which situation which method is selected