QUESTION 2 (25 MARKS) Galaxy Enterprise closes its accounting period on 31 December annually. The statement of Profit or Loss for the year ended 2020 for Galaxy Enterprise as shown below: Galaxy Enterprise Statement of Profit or Loss for the year ended 31 December 2020 RM RM RM Sales 630,000 Less: return Inwards (50,000) Net Sales 580,000 25,000 Less: Cost of Goods Sold Opening Inventory Purchases Less: return Outwards 295,000 (80,000) Closing inventory 215,000 (18,000) (222,000) 358,000 Gross Profit 27,000 Add: Revenue Less: Expenses (16,000) NET PROFIT 369,000 Additional information: 1. All sales were made on credit. 2. The following is the extract of Statement of Financial Position for Galaxy Enterprise as at 31 December 2020: CURRENT ASSETS Cash at bank 36,750 Closing inventory 18,000 Debtor 26,000 Prepaid Expenses 250 CURRENT LIABILITIES Creditor Accrued Rental 31,000 6,000 3. Use 365 days in a year. Required: Calculate the following ratio and give comments for each of the following: i. Current ratio (5 marks) (CLO2:PLO5:04) ii. Quick ratio (5 marks) (CLO2:PLO5:04) iii. Inventory turnover ratio (5 marks) (CLO2:PLO5:04) iv. Average collection period (5 marks) (CLO2:PLO5:04) Gross profit margin (5 marks) (CLO2:PLO5:04)