3.4 The following is the statement of financial position of TT and Co. (see Self-assessment question 3.1 on page 107) at the end of its first year of trading:

During 2016, the following transactions took place:
1 The owners withdrew equity in the form of cash of £20,000.
2 Premises continued to be rented at an annual rental of £20,000. During the year, rent of £15,000 was paid to the owner of the premises.
3 Rates on the premises were paid during the year as follows: for the period 1 April 2016 to 31 March 2017, £1,300.
4 A second delivery van was bought on 1 January 2016 for £13,000. This is expected to be used in the business for four years and then to be sold for £3,000.
5 Wages totalling £36,700 were paid during the year. At the end of the year, the business owed £860 of wages for the last week of the year.
6 Electricity bills for the first three quarters of the year and £620 for the last quarter of the previous year were paid, totalling £1,820. After 31 December 2016, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of £690.
7 Inventories totalling £67,000 were bought on credit.
8 Inventories totalling £8,000 were bought for cash.
9 Sales revenue on credit totalled £179,000 (cost £89,000).
10 Cash sales revenue totalled £54,000 (cost £25,000).
11 Receipts from trade receivables totalled £178,000.
12 Payments to trade payables totalled £71,000.
13 Van running expenses paid totalled £16,200.
The business uses the straight-line method for depreciating non-current assets.
Required:
Prepare a statement of financial position as at 31 December 2016 and an income statement for the year to that date.

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Statement of financial position as at 31 December 2015 ASSETS Non-current assets Property, plant and equipment Delivery van at cost 12,000 Depreciation Current assets (2,500) 9,500 Inventories Trade receivables 65,000 19,600 Prepaid expenses* 5,300 Cash 750 90,650 Total assets 100,150 EQUITY AND LIABILITIES Equity Original Retained earnings Current liabilities Trade payables Accrued expenses* Total equity and liabilities *The prepaid expenses consisted of rates (300) and rent (5,000). The accrued expenses consisted of wages (630) and electricity (620). 50,000 26,900 76,900 22,000 1,250 23,250 100,150