The following values relate to various ratios determined for a sole trader, A. Solve, for the year ended 30 June 2020. At that date, the total assets in the statement of financial position were $1 200 000. The ratios relate to the accounts either in respect of the 12-month period or at the date of the statement of financial position for the end of the period.

Required

Assuming there are no prepaid expenses and that trade accounts payable are the only liability, and rounding answers to the nearest dollar, prepare:

(a) a detailed statement of profit or loss for the year ended 30 June 2020, including an itemised cost of sales calculation (assuming a periodic inventory system)

(b) a statement of financial position as at 30 June 2020.

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1. Profit to total assets 2. Current ratio 3. Acid-test ratio 15% 2.5:1 2:1 4. Credit sales to trade accounts receivable 7.5:1 5. Gross profit to total sales 25% 6. Trade accounts payable to purchases 40% 7. Credit sales to total sales 8. Profit margin 75% 10% 9. Profit to equity (commencement of year) 10. Non-current assets to current assets 30% 10%