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Wisdom Learning is an e-learning business that specialises in providing online learning resources in accounting, economics, and marketing management. The adjusted trial balance of Wisdom

Wisdom Learning is an e-learning business that specialises in providing online learning resources in accounting, economics, and marketing management. The adjusted trial balance of Wisdom Learning as at 30 June 2019 as follows.

Wisdom Learning is an e-learning business that specialises in providing online learning resources in accounting, economics, and marketing management. The adjusted trial balance of Wisdom Learning as at 30 June 2019 as follows.

Debit $

Credit $

Cash at Bank

17200

Accounts Receivable

3900

Office Supplies

900

Prepaid Rent

3000

Equipment

60000

Accumulated Depreciation - Equipment

300

Furniture

27000

Accumulated Depreciation - Furniture

450

Accounts Payable

12300

Salary Payable

1350

Interest Payable

150

Unearned Service Revenue

2400

Loan Payable

60000

Owners, Capital

4800

Owners, Drawings

1500

Service Revenue

39600

Rent Expense

2100

Salary Expense

4700

Supplies Expense

150

Depreciation Expense - Building

300

Depreciation Expense - Furniture

450

Interest Expense

150

121350

121350

Required:

a) Prepare Wisdom Learnings Income Statement for the year ended 30 June 2019. (8 Marks)

b) Prepare Wisdom Learnings Statement of Changes in Equity for the year ended 30 June 2019. (4 Marks)

c) Calculate Wisdom Learnings Profit Margin and Return on Assets ratios (the total assets at 30 June 2018 was $109000). (Show all calculations, Round off the answers to the nearest 2 decimal places). (2 Marks)

d) (i) Calculate Wisdom Learnings Current ratio and the Debt-to-total assets ratio at 30 June 2019. (Show all calculations, Round off the answers to the nearest 2 decimal places). (2 Marks)

(ii) Discuss Wisdom Learnings liquidity and solvency positions at 30 June 2019 as compared to 2018 (the Current ratio was 1.65:1 and the Debt-to-total assets ratio was 54.75% at 30 June 2018). (4 Marks) (Total 20 Marks)

Required:

a) Prepare Wisdom Learnings Income Statement for the year ended 30 June 2019. (8 Marks)

b) Prepare Wisdom Learnings Statement of Changes in Equity for the year ended 30 June 2019. (4 Marks)

c) Calculate Wisdom Learnings Profit Margin and Return on Assets ratios (the total assets at 30 June 2018 was $109000). (Show all calculations, Round off the answers to the nearest 2 decimal places). (2 Marks)

d) (i) Calculate Wisdom Learnings Current ratio and the Debt-to-total assets ratio at 30 June 2019. (Show all calculations, Round off the answers to the nearest 2 decimal places). (2 Marks)

(ii) Discuss Wisdom Learnings liquidity and solvency positions at 30 June 2019 as compared to 2018 (the Current ratio was 1.65:1 and the Debt-to-total assets ratio was 54.75% at 30 June 2018). (4 Marks) (Total 20 Marks)

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