Prepare a detailed income statement and balance sheet

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Reference no: EM13903962

The following values relate to various ratios determined for a sole trader, Ben Bournemouth, for the year ended 30 June 2013. At that date, the total assets in the Balance Sheet were $900 000. The ratios relate to the accounts either in respect of the 12-month period or at the date of the Balance Sheet for the end of the period.

Gross Profit to Total Sales	=	25%
Current Ratio	=	2.5:1
Quick (acid test) Ratio	=	2:1
Credit Sales to Total Sales	=	75%
Non-current Assets to Current Assets	=	10%
Profit to Total Assets	=	15%
Accounts Payable to Purchases	=	40%
Profit Margin	=	10%
Profit to Equity (start of period)	=	30%
Credit Sales to Accounts Receivable	=	7.5:1

Required:

Assuming that there are no prepaid expenses and that accounts payable are the only liability, and rounding answers to the nearest dollar, prepare:

A detailed Income Statement for the year ended 30 June 2013, including an itemised cost of sales calculation (assuming a periodic inventory system)
The business' Balance Sheet as at 30 June 2013.

Reference no: EM13903962

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