The following information is extracted from the 2019 and 2020 financial reports of Ali's Actuarial Services.

2019
Cash at Bank	140,000
Account Receivables	150,000
Land	700,000
Building	600,000
Accumulated depreciation - Building	220,000
Unearned revenue	132,000
Loan 6 months	88,000
Mortgage	300,000
Capital	748,000
Service revenue	196,000
Rent Expense	58,000
Wages Expense	36,000

2020
Cash at Bank	132,000
Account Receivables	121,000
Land	700,000
Building	600,000
Accumulated depreciation - Building	250,000
Unearned revenue	120,000
Loan 6 months	78,000
Mortgage	250,000
Capital	855,000
Service revenue	202,000
Rent Expense	60,000
Wages Expense	38,000

e) (1 mark) Which of the following is the correct Current ratio for the 2019 financial year?

0.65:1

3.285:1

1.28:1

3.6:1

1.32:1

f) (1 mark) Which of the following is the correct Current ratio for the 2020 financial year?

1.32:1

3.285:1

1.28:1

0.65:1

1.45:1

g) (1 mark) Which of the following is the correct Debt to Total Assets ratio for the 2020 financial year?

0.29:1

0.32:1

0.190:1

0.34:1

0.38:1

h) (2 marks) Which of the following transactions can immediately improve the Current Ratio?

Borrow a bank loan that is due in 3 years.

Repay a bank loan that is due in 3 years.

Receive cash for service provided and recorded before.

Use cash to buy supplies.

Buy a company vehicle on credit.

i) (2 marks) Which of the following transactions can immediately improve the Return on Assets?

Buy equipment on credit.

Borrow a bank loan that is due in 3 years.

Owner withdraw cash from the business.

Change the useful life of a company car from 7 years to 4 years.

Owner contribute cash to the business.

j) (2 mark) Which of the following would apply to the liquidity of the business

Liquidity has remained the same over time so the rule of thumb is irrelevant.

Liquidity has decreased over time however is still above the rule of thumb.

Liquidity has increased over time and is above the rule of thumb.

Liquidity has decreased over time and is below the rule of thumb.

Liquidity has increased over time however is still below the rule of thumb.