The adjusted trial balance of Chelsea Ltd as at 30 June 2020 is given below.

Chelsea Ltd

Adjusted trial balance

30 June 2020

Debit $

Credit $

Cash at Bank

8400

Accounts Receivable

4200

Office Supplies

3800

Office Equipment

17 000

Accumulated Depreciation - Office equipment

4000

Accounts Payable

4000

Unearned Revenue

5000

Share Capital

14 500

Retained Earnings

5400

Dividends Paid

1500

Service Revenue

13500

Interest revenue

3500

Wages expense

2400

Utilities expense

1600

Advertising expense

1800

Insurance expense

1200

Office Supplies Expense

1600

Depreciation Expense - Equipment

3500

Rent Expense

2900

49 900

49 900

Required:

a)Prepare Chelsea Ltd's Statement of Income Statement for the year ended 30 June 2020.(10 Marks)

b)Prepare Chelsea Ltd's Statement of Changes in Equity for the year ended 30 June 2020.(4 Marks)

c)(i) Calculate Chelsea Ltd's Current ratio and the Debt-to-total assets ratio at 30 June 2020.(Round off

the answers to the nearest 2 decimal places).(2 Marks)

(ii) Explain your Current ratio and how it reflects on the company's ability to meet its obligations.

(2 Marks)

d)(i) The profit margin for Chelsea Ltd for 2019 and 2020 were 12% and 18% respectively. Interpret the

meaning of profit margin for 2020.(1 Mark)

(ii) Comment on the profitability trends of Chelsea Ltd from 2019 to 2020.(1 Mark)(Total 20 Marks)