Question 1 1.1 Define or explain the following (a) debtors (b) preference share (c) statement of accumulated profit (d) prepaid expense (4) 1.2 In 2019, New Horizons Ltd (a hardware retail company) sold 10 000 units of its product and reported net sales of R3 800 000. New Horizons purchased the 10 000 units of its product from its manufacturer in 2019 at an average cost of R300 per unit. Operating expenses (excluding depreciation) for New Horizons Ltd in 2019 were R400 000 and depreciation expense was R100 000. New Horizons had R2 000 000 in debt outstanding throughout all of 2019. This debt carried an average interest rate of 10 percent. Finally, New Horizons's tax rate was 40 percent. New Horizons' fiscal year runs from January 1 through December 31. Given this information, construct New Horizons' 2019 income statement. (10) 1.3 Using the following (scrambled) accounts to prepare a balance sheet for Big Bay Ltd, (a retail company) for the year ending December 31, 2019 (assume that these are the only balance sheet accounts): Accounts payable 39 000 Gross accounts receivable 40 000 Accrued expenses 8 000 Gross fixed assets 486 000 Accumulated depreciation 51 000 Inventories 54 000 Additional paid-in capital 86 000 Long term debt 210 000 Allowance for doubtful accounts 2 000 Net accounts receivable 38 000 Cash 23 000 Net fixed assets 435 000 Common stock 45 000 Retained earnings 138 000 Current portion of Long-term 6 000 Short-term bank loan (notes payable) 18 000 Debt (10) [24]