ASSIGNMENT TWO, QUESTION FIVE From the following trial balance of John Brown, store owner, prepare a trading account and profit and loss account for the year ended $31$ December $2017,$ and a balance sheet as at that date, taking into consideration the adjustments shown below: Trial Balance as at $31$ December $2017$ Dr Cr GHC GHC Sales $400,000$ Purchases $350,000$ Sales returns $5,000$ Purchases returns $6,200$ Opening stock at $1$ January $20$X$7100,000$ Provision for doubtful debts $800$ Wages and salaries $30,000$ Rates $6,000$ Telephone $1,000$ Shop fittings at cost $40,000$ Van at cost $30,000$ Debtors and creditors $9,8007,000$ Bad debts $200$ Capital $179,000$ Bank balance $3,000$ Drawings $18,000593,000593,000$ i$.$ Closing stock at $31$ Dec. $2017$ GHC$120,000.$ ii$.$ Accrued wages GHC$5,000.$ iii. Rates prepaid GHC$500.$ iv$.$ The provision for doubtful debts to be increased to $10$ per cent of debtors. v$.$ Telephone account outstanding GHC$220.$ vi$.$ Depreciate shop fittings at $10$ per cent per annum, and van at $20$ per cTrial Balance as at $31$ December $20$X$7$

The following additional information was available:

$($i$)$ Closing stock at $31$ December $207120,000.$

$($ii$)$ The number of common shares outstanding were $100,000$ shares.

$($iii$)$ The amortization of the company accounted to $3000.$

$($iv$)$ The interest accounted to $4500$ and the tax to be charged on profit is $3\%.$

$($v$)$ The market price of the firm is $35$ and the cash dividends to be paid to the shareholder is

$2500.$

$($vi$)$ The retained eamings at the start of the year is $4320.$

REQUIRED

Prepare the Income statement, Balance sheet, Statement of Retained Earnings and calculate the following

ratios.

Operating Margin, Profit Margin, ROA, ROE, EPS, DPS$,$ Dividend Payout Ratio, Market Value of Equity,

Working Capital, Current Ratio, Acid Test Ratio, Debt Ratio and equity Ratioent per annum, on cost