The following additional information is available for the second month of trading for Mr Brown (Problem 6 above) :

(i) Cash purchases of goods amounted to £1300.

(ii) Purchases of goods on credit amounted to £250. These goods had not been paid for at the end of the month.

(iii) Cash sales amounted to £1140.

(iv) Credit sales amounted to £1130. Of these sales, £1000 were paid for by customers before the end of the second month.

(v) The cost of goods sold amounted to £1100.

(vi) Motor expenses paid in cash amounted to £470.

(vii) Payment of interest on bank loan for 2 months, £18.

(a) Analyse the above transactions using a suitable accounting equation format.

(b) Prepare, in good form , an Income Statement for the second month of operations, and a Balance Sheet at the end ofthe second month of operations..