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Digital Systems Ltd reported the following for the year: Item Amount () Fair Market Value of assets 800,000 Total Liabilities 350,000 Net Income 90,000 Requirements:

Digital Systems Ltd reported the following for the year:

Item

Amount (£)

Fair Market Value of assets

800,000

Total Liabilities

350,000

Net Income

90,000

Requirements:

  1. Calculate the Return on Equity (ROE) for Digital Systems Ltd.
  2. Discuss the impact of fair market value on the company’s financial statements.
  3. Draft a summarized income statement for the year ended 31 December 2021.

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