(ii) Calculate the return on total assets for each business. Discuss the ratio and compare the two businesses in terms of this ratio. Justify your answer. (7 marks) Sales Cash Sales Credit Sales INCOME STATEMENT For the year ended 31 December 2018 Adam Ltd Eve Ltd $ $ 870,000 1,404,000 3.242.000 2,500,000 4,112,000 3,904,000 2.552.000 2.342.000 1,560,000 1,562,000 Cost of Goods Sold Gross Profit Expenses Selling Expenses Administration Expenses Interest Expenses Total Expenses 470.000 337,000 51,000 858.000 552,600 373,200 56.400 982.200 Net Profit 702.000 579.800 Question One continued BALANCE SHEET as at 31 December 2018 Adam Ltd Eve Ltd $ 2,195,400 2,612,400 Owners' Equity Represented by: Current Assets Cash at Bank Marketable Securities Accounts Receivable Inventory 392,000 168,600 328,000 596,000 1,484.600 74,000 18,800 246,600 1.156,000 1,495,400 Non-current assets Equipment (net) Buildings (net) Land 150,000 1,000,000 900,000 2.050,000 3,534,600 170,000 1,400,000 700.000 2.270.000 3,765,400 Total Assets Current Liabilities Accounts Payable Accrued Expenses 574,000 35.200 609,200 338.000 11.000 349,000 Non-Current Liabilities Loan Total Liabilities Net Assets 730.000 1.339.200 2.195.400 804.000 1.153.000 2.612.400 Further information Balances as at 1 January 2018: Accounts Receivable Inventory Total Assets Total Owners' Equity 324,200 570,000 3,362.000 1.733,400 215,600 994.000 3,710,000 2.288,600 Question One continue Page 7 of 14