Wong PTY LTD

Adjusted trial balance

As at 31 October 2019

Account name

Debit

Credit

Cash

$15,400

Supplies

1,550

Equipment

5,000

Accumulated depreciation

40

Accounts payable

2,550

Salaries payable

2,000

Bank loan (non-current)

5,000

Share capital

10,000

Retained earnings

0

Dividends

500

Service revenue

10,600

Salaries expense

7,650

Interest expense

50

Depreciation expense

40

$30,190

$30,190

Required:

1. Prepare a Profit or Loss Statement (4 marks)
2. Prepare a Balance Sheet (7 marks)
3. Based on the Profit or Loss Statement and Balance Sheet, calculate the following ratios:

• Return on assets (i.e., net profit/total assets)
• Return on equity (i.e., net profit/total equity)
• Current ratio (i.e., current assets/current liabilities)
• Debt to asset ratio (i.e., total liabilities/total assets)

1. Explain what useful information the ratios in (3) can provide to external users