Question 1 (Total: 40 marks) The balance sheet of Torrent and Co at the end of the first of trading is as follows: During 2022, the following transactions took place: 1 The owners withdrew capital in the form of cash of RM30,000. 2 Premises continued to be rented at an annual rental of RM200,000. During the year, rent of RM160,000 was paid to the owner of the premises. 3 Rates on the premises were paid during the year as follows: for the period 1 April 2022 to 31 March 2023 RM12,000. 4 A second delivery van was bought on 1 January 2022 for RM130,000 by a bank loan. There will be four equal instalments every 6 months. The first payment is due on 30 June and the second payment is due on 31 December. This van is expected to be used in the business for four years and then to be sold for RM30,000. 5 Wages totalling RM367,000 were paid during the year. At the end of the year, the business owed RM18,600 of wages for the last week of the year. 6 Electricity bills for the first three quarters of the year and RM6,200 for the last quarter of the previous year were paid totalling RM24,000. After 31 December 2022, but before the accounts had been finalised for the year, the bill for the last quarter arrived showing a charge of RM6,900. 7 Inventories totalling RM670,000 were bought on credit. 8 Inventories totalling RM80,000 were bought for cash. 9 Sales revenue on credit totalled RM1,790,000 (cost RM890,000). 10 Cash sales revenue totalled RM540,000 (cost RM250,000). 11 Receipts from trade receivables totalled RM1,578,000. 12 Payments to trade payables totalled RM689,000. 13 Van running expenses paid in cash totalled RM10,200. 14 The business uses the straight-line method for depreciating non-current assets. Required: a) Prepare an Income Statement for the year ending 31 December 2022; 20 marks and b) Prepare a Balance Sheet as at 31 December 2022 20 marks Question 2 (Total: 25 marks) Marksman Sdn Bhd's income statements for the years ended 31 December 2021 and 2022 and the statements of financial position (balance sheet) as at 31 December 2021 and 2022 are as follows: Additional information 1. Depreciation expenses included in 'cost of sales', 'distribution expenses', and administrative expenses' was as follows: 3 j 2. There were no non-current asset disposals in either year. 3. The amount of cash paid for interest equalled the expense in each year. 4. Dividends were paid totalling RM18,000,000 in each year. 5. Companies pay tax of 50% during their accounting year and the other 50% in the following year. Required: a) Your task is to prepare a Statement of Cash flows for the year ended 31 December 2022. 20 marks b) Explain why profit should be reconciled to net operating cash flows. Give examples from this question to explain your answer. 5 marks Question 3 (Total: 35 marks) A business makes three products, A, B and C. All three products require the use of two types of machines: cutting machines and assembling machines. Estimates for next year include the following: Fixed costs for next year are expected to total RM42,000. It is the business's policy for each unit of production to absorb these in proportion to its total variable costs. The business has cutting machine capacity of 5,000 hours a year and assembling machine capacity of 8,000 hours a year. Required: (a) Identify the limiting factor. cutting machine capacity or assembling machine capacity. (6 marks) (b) What quantities of each product should the business produce next year? (9 marks) (c) How much profits would the company make next year based on the quantities determine in (b)? (5 marks) (d) If there is a limited resource, i.e., resource constraint, that is restricting sales, how will the business maximise its profit? What is your recommendation to maximise profit for the business when there is a resource constraint? (5 Marks) (e) Explain how fixed costs and variable costs behave when the level of activity increases. Consider the effect on cost behaviour on total values and at per unit values. (10 marks) Note: State all relevant formulas in your assessment of the strategies