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 Ltds Statement of Income Statement for the year ended 30 June 2020. (10 Marks)

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

c) (i) Calculate Chelsea Ltds 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 companys 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)

(a) Chelsea Ltd Income statement for the year ended 30 June 2020 $ (b) Chelsea Ltd Statement of changes in equity for the month ended 30 June 2020