14 marks a) Use the following information for Sally's Salon to prepare an income statement and balance sheet for 2020 and 2021. Do not worry about proper financial statement titles. 2020 2021 65,730 $ 6,115 $ Tax rate 35% Accounts payable Accounts receivable 11,100 25,363 Number of shares 42,000 $42.00 Cash 20,670 38,532 Market price of share Common shares 56,000 56,000 59,230 54,920 55,500 6,655 32,100 42,271 Cost of goods sold Depreciation expense Dividends paid Interest expense Inventory Long-term debt Net fixed assets Notes payable Other expenses Sales 77,335 ? 142,300 99,090 13,630 17,032 31,905 220,220 Income Statement: 2021 Balance Sheet: 2020 2021 2020 2020 2021 5 marks b) Using your financial statements above, calculate the following ratios for Sally's Salon in column F. Ratios are then shown for a similar type of salon in column G. In Column H, choose whether Sally's Salon's ratios are better or worse than the comparison salon's (use the drop-down list for each ratio). Sally's Salon Comparative Salon Analysis 1. Quick ratio 1.1:1 2. Inventory turnover 2.9 times 51.5% 3. Return on assets 4. Return on equity 5. Price-earnings ratio 78.2% 9.5 times