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Please answer question 3 only. Here, I will provide my answer for Questions 1 & 2 for reference in Question 3. ASSIGNMENT 1 Innovative Product

Please answer question 3 only. Here, I will provide my answer for Questions 1 & 2 for reference in Question 3.

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ASSIGNMENT 1 Innovative Product Incorporated needs to prepare financial statements based on the information given below for the year end 31 December 2019. The information obtain are as follows:- Interest revenue 50,000 Depreciation 5,000 Administrative expenses 6000 Sales 50,000 Interest expenses 1,000 Selling expenses 9,000 Cost of good sold 25,000 Tax 35% Equipment 60,000 Inventory 20,000 Vehicles 40,000 Land and building 180,000 Cash and cash equivalent 200,000 Income tax payable 70,000 Account payable 64,000 Retained earnings 100,000 Account Receivable 34,000 Common stock 100,000 Long term debt 200,000 Question. 1. Prepare the financial statements necessary based on the information given. 2. Analyze the Innovative Product Incorporated financial strength by quantifying the financial ratios. 3. Forecast the changes in the financial strength that might take place if the following changes takes place in the macroeconomic fundamentals. - Expected inflation rate to increase 3% - Current GDP is 4.5% - Unemployment rate 3\% - Interest rate 4% - Exchange rate has depreciated 5\% - Government is giving out subsidy and also increasing tax rates to finance its expenditure. Balance Sheet 2.) Financial Ratios

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