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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

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)

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