You are the financial director of We-Structural Engineering. The following information is prepared by your head accountant and presented to you for the current year (2020) and the comparative year (2019): 2020 2019 Current ratio 2.4:1 1.6:1 Acid-test ratio 0.4:1 Debtor's collection period 68 days 90 days Creditor's payment period 30 days 30 days Inventory turnover rate 5 times 0.9:1 4 times Required: After an analysis and interpretation of the above information prepare a detailed report that you would present to your Board of Directors explaining liquidity and working capital management QUESTION THREE [30] Quencher Limited's business involves the bottling and distribution of a wide variety of carbonated soft drinks. Some drinks are developed intemally, whilst other brands are purchased. The following information is relevant to the business for the year ended 30 May 2020 Fliptop is a revolutionary tyre of can which has been developed internally by Quencher over the past two years. The can has a re-saleable top which allows the can to be sealed after opening to prevent the gas escaping. In January 2019 the idea for this new product was launched, and a loan of R5 000 000 was obtained from Borrow Bank in order to finance this project The chronology of its development and associated costs for the year ended 31 May 2020 are as shown in the following table Date Nature of activity Expenditure R 40 000 200 000 01/06/2019- Market surveys to establish whether 31/07/2019 or not consumers would want such a can 01/08/2019- Evaluation of a number of alternative 15/09/2019 prototypes and designs 30/09/2019 A design is chosen and engineers produce a plan which indicates that it is technically possible to produce the Fliptop can 1/10/2019 - 31/01/2020 Design and construction of a pilot manufacturing plant 01/02/2020- Test of a piot manufacturing plant 31/05/2020 1 100 000 600 000 All expenditure incurred has been confirmed by the accounting department. Ouencher has applied to register the Fliptop can as a patent Required: Discuss, with reference to IAS 38: Intangible Assets, the correct accounting treatment for all the costs incurred in relation to the Fiplop can for the year ended 31 May 2020. QUESTION FOUR [20] Cabrio Limited is involved in manufacturing gizmos (these are parts used in convertibies that allow the roof to open and close). Cabrio Limited has approximately 1 000 employees, all of whom are covered by the company's defined benefit pension plan. The following information pertains to this pension plan Plan assets : 01 January 2020 Plan obligation: 01 January 2020 Current service costs Contributions paid during the year Expected return on assets Discount rate Unrecognised actuarial loss.01 January 2020 Benefits paid to members during the year Plan assets: fair value 31 December 2020 Plan obligation: present value 31 December 2020 R300 000 R400 000 R100 000 R200 000 10% 15% R55 000 R100 000 R400 000 R500 000 Employees are expected to work for an average of 15 years at Cabrio Limited. Cabrio limited utilises the corridor approach to account for its unrecognised actuarial gains and losses. Required: Prepare the journal entries to account for the defined to account for the defined benefit plan in terms of the requirements set out in IAS 19