Question - The account balances as at December 31, 2018 are as follows: Cash $602,900; Accounts receivable $10,000; Merchandise inventory $3,000; Prepaid rent $3,150; Equipment $55.000; Accumulated depreciation $13,750; Land $40,000; Accounts payable $0, Long-term note payable $200,000; Common shares $440.000; and Retained earnings $60,300.

The following transactions and events occurred in 2019.

Jan. 1 - Issued $50,000 of 5% preferred shares for cash.

Jan. 1 - sold the equipment at its written down value (book value) for cash.

Jan 1 - Acquired new equipment for $150.000 cash. The new equipment has an estimated useful life of 15 years and no expected residual value

Apr. 1 - purchased inventory for $80,000 cash from ordinary suppliers.

July 1 - Paid rent in advance of $3,200 on a six-month office lease.

Aug. 1 - Made cash sales of $150,000. The related cost of goods sold was $65,000.

Sept. 1 - Purchased additional land for cash of $20,000.

Oct. 31 - All remaining accounts receivable were collected.

Dec. 30 - various operating expenses totalled $40,000. All were paid in cash except for $5,000 for utilities, which will be paid in January.

Dec. 31 - Paid the annual dividend on the preferred shares, and a 5 cent dividend per common share.

Dec. 31 - paid the interest on the bank loan.

Dec. 31 - Recorded depreciation for the new equipment.

Dec. 31 - Recorded rent expense for 2019.

Dec. 31 - Paid cash of $3,800 for income taxes.

Required:

1. Using the transactions-based approach (tabular analysis), record the above transactions and events for 2019. Determine the ending balances for all accounts that are included in the tabular analysis.
2. Prepare an income statement for the year 2019.
3. Prepare a statement of changes in retained earnings for the year 2019.
4. Prepare a balance sheet as at December 31, 2019.
5. Using the financial statements you prepared, calculate the following:

1. Return on assets ratio
2. Return on equity ratio
3. Gross profit percentage
4. Return on sales ratio
5. Net income to sales ratio
6. Earnings per share
7. Dividend pay-out ratio
8. Receivables turnover ratio
9. Inventory turnover ratio
10. Asset turnover ratio.
11. Current ratio
12. Quick ratio
13. Debt to equity ratio
14. Debt to assets ratio