uestion 7 (20 Marks)

Presented below is the adjusted trial balance of Taylor Investment Advisers as at 30 June 2021.

Taylor Investment Advisers
Trial Balance
As at 30 June 2021
	Debit $	Credit $
Cash at Bank	32,000
Accounts Receivable	6,500
Office Supplies	1,500
Prepaid Rent	5,000
Equipment	145,000
Accumulated Depreciation - Equipment		1,250
Accounts Payable		20,500
Salary Payable		2,250
Interest Payable		250
Revenue received in advance		4,000
Bank loan (5 Years)		100,000
Taylor's, Capital		30,000
Taylor's, Drawings	2,500
Service Revenue		44,000
Rent Expense	3,500
Salary Expense	4,500
Supplies Expense	250
Depreciation Expense - Equipment	1,250
Interest Expense	250
	202,250	202,250

Required:

a) Prepare Taylor Investment Advisers Income Statement for the year ended 30 June 2021. (8 Marks)

b) Prepare Taylor Investment Advisers Statement of Changes in Equity for the year ended 30 June 2021. (4 Marks)

c) Calculate Taylor Investment Advisers Profit Margin and Return on Assets ratios (the total assets at 30 June 2020 was $177,500) (Round off the answers to the nearest 2 decimal places). (2 Marks)

d) (i)Calculate Taylor Investment Advisers Current ratio and the Debt-to-total assets ratio at 30 June 2021. (Round off the answers to the nearest 2 decimal places). (2 Marks)

(ii)Discuss Taylor Investment Advisers liquidity and solvency positions at 30 June 2021 as compared to 2020 (the Current ratio was 1.92:1 and the Debt-to-total assets ratio was 51.8% at 30 June 2020). (4 Marks)