The statement of financial position of WW Associates

  The following is the statement of financial position of WW Associates as at 31 December 2016: Statement of financial position as at 31 December 2016 £ ASSETS Non-current assets Machinery 25,300 Current assets Inventories 12,200 Trade receivables 21,300 Prepaid expenses (rates) 400 Cash 8,300 Total Curent Asset 42,200 Total assets 67,500 EQUITY AND LIABILITIES Equity Original 25,000 Retained earnings 23,900 Total Equity 48,900 Current liabilities Trade payables 16,900 Accrued expenses (wages) 1,700 Total Current liabilities 18,600 Total equity and liabilities 67,500 During 2017, the following transactions took place: 1 The owners withdrew equity in the form of cash of £23,000. 2 Premises were rented at an annual rental of £20,000. During the year, rent of £25,000 was paid to the owner of the premises. 3 Rates on the premises were paid during the year for the period 1 April 2017 to 31 March 2018 and amounted to £2,000. 4 Some machinery (a non-current asset), which was bought on 1 January 2016 for £13,000, has proved to be unsatisfactory. It was part-exchanged for some new machinery on 1 January 2017 and WW Associates paid a cash amount of £6,000. The new machinery would have cost £15,000 had the business bought it without the trade- in. 5 Wages totalling £23,800 were paid during the year. At the end of the year, the business owed £860 of wages. 6 Electricity bills for the four quarters of the year were paid totaling £2,700. 7 Inventories totalling £143,000 were bought on credit. 8 Inventories totalling £12,000 were bought for cash. 9 Sales revenue on credit totalled £211,000 (cost £127,000). 10 Cash sales revenue totalled £42,000 (cost £25,000). 11 Receipts from trade receivables totalled £198,000. 12 Payments to trade payables totalled £156,000. 13 Van running expenses paid totalled £17,500. The business uses the reducing-balance method of depreciation for non-current assets at the rate of 30% each year. Required: Prepare : a) a statement of financial position as at 31 December 2017 b) an income statement for the year to that date.