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LUNAR PROJECTIONS LTD. INCOME STATEMENT YEAR ENDED DECEMBER 31, 20- $500 000 Revenue Sales Cost of Goods Sold Merchandise Inventory, January 1 Purchases Merchandise Available for Sale Less: Merchandise Inventory, Dec 31 Gross Profit $ 5 000 418 000 $423 000 48000 375 000 $125 000 Operating Expenses Bank Charges Depreciation Expense Management Salaries Miscellaneous Expense Mortgage Interest Telephone Expense Utilities Expense Wages Expense Net Income $ 3 000 32 000 30 000 1 000 I 5000 4 000 5 000 40 000 120 000 $ 5 000 The balance sheet and income statement of Lunar Projections Ltd. are shown below. (7.5 marks) Requirede Calculate the following ratios and percentages. Last year ratios are also given. Compare your result to the last year. Below each calculation, write a brief comment that explains and evaluates the result taking into consideration the Previous year ratio. LUNAR PROJECTIONS LTD. BALANCE SHEET DECEMBER 31, 20- I $ 6000 21 000 48 000 $75 000 ASSETS Current Assets Bank Accounts Receivable Merchandise Inventory Long-Term Assets Land Building Equipment Total Assets $ 25 000 400 000 75 000 500 000 $575 000 LIABILITIES AND EQUITY Current Liabilities Bank Loan Accounts Payable Long-Term Liability Mortgage Payable $ 5 000 20 000 $ 25 000 100 000 Shareholders' Equity Share Capital Retained Eamings Total Liabilities and Equity $ 100 000 136 500 450 000 $575 000 LUNAR PROJECTIONS LTD. INCOME STATEMENT YEAR ENDED DECEMBER 31, 20- $500 000 Revenue Sales Cost of Goods Sold Merchandise Inventory, January 1 Purchases Merchandise Available for Sale Less: Merchandise Inventory, Dec 31 Gross Profit $ 5 000 418 000 $423 000 48000 375 000 $125 000 Operating Expenses Bank Charges Depreciation Expense Management Salaries Miscellaneous Expense Mortgage Interest Telephone Expense Utilities Expense Wages Expense Net Income $ 3 000 32 000 30 000 1 000 I 5000 4 000 5 000 40 000 120 000 $ 5 000 a. current ratio-1 mark Last year ratio is 24 - b. quick ratio-1 mark Last year ratio is ft:54