Drinkwater Inc. reported the following information:

Other information:

1. No shares were issued during the years ended March 31, 2020 and 2019.

2. No dividends were declared or paid during the years ended March 31, 2020 and 2019.

3. The market values per common share at March 31, 2020, and March 31, 2019, were $29 and $25, respectively.

4. Industry averages for 2020 were as provided in the chart on the following page.

Required

1. Using the information provided for Drinkwater Inc., prepare a comparative, single-step income statement and statement of changes in equity for the years ended March 31, 2020 and 2019, as well as a comparative classified balance sheet at March 31, 2020 and 2019.

2. Complete the chart below for Drinkwater Inc. (round all ratios to two decimal places):

Transcribed Image Text:

Drinkwater Inc. Adjusted Trial Balance March 31, (In thousands of Canadian dollars) 2020 2019 2018 $ 136,000 $ 98,000 $ 76,000 Cash. Accounts receivable. 238,000 206,000 219,000 2,300 Allowance for doubtful accounts. 2,100 2,000 Inventory. 84,000 71,000 48,000 Prepaid insurance. 50 30 25 150 Notes receivable, due in six months.. 600 400 Property, plant, and equipment assets. 1,621,100 1,234,670 838,640 Accumulated depreciation. 325,000 208,000 102,000 174,000 145,000 Accounts payable. 219,000 Unearned sales. 3,100 750 315 Notes payable, due in 2025 114,000 116,200 77,950 Preferred shares; $1 non-cumulative; 20,000 shares issued and outstanding. 100,000 100,000 100,000 Common shares; 50,000 shares issued and outstanding. 250,000 250,000 250,000 491,550 Retained earnings. 772,050 294,300 943,000 Sales. 798,000 503,000 Sales discounts. 14,000 11,000 7,000 Cost of goods sold. 196,000 424,000 335,000 Other operating expenses 141,000 103,000 50,000 7,000 Investment income.. 9,000 5,000 6,500 Interest expense 5,700 8,750 Income tax expense. 73,000 69,000 49,000 Favourable or Unfavourable Relative to Industry Average for 2020 Favourable or Calculate Calculate Unfavourable the Ratio the Ratio Change from Favourable or Industry Average for 2020: for 2019: Previous Year Unfavourable a. Current ratio. 1.96:1 b. Quick ratio 1.42:1 c. Accounts receivable turnover. 4.35 d. Days' sales uncollected 95.12 e. Inventory turnover. f. Days' sales in inventory. 5.20 75.08 g. Total asset turnover 1.8 h. Accounts payable turnover. 8.45 i. Debt ratio.. 21% j. Equity ratio.. k. Times interest earned. I. Profit margin. 79% 50.16 30.14 m. Gross profit ratio. 52.16 n. Return on total assets. 17.20% o. Return on common shareholders' equity. 31.00% p. Book value per common share. q. Book value per preferred share. 14.91 $22.00 r. Earnings per share. $4.32 s. Price-earnings ratio. 6.91