11. (a) State the relationship between assets, equity, liabilities, expenses and revenues using an appropriate accounting cquation. Assume there were no drawings or dividend payments for the period. (5 Marks) (b) Briefly state the separate impacts of cash flows and accruals on the quality of earnings. (5 Marks) (c) The following transactions relate to Johnson Trading, a sole proprietorship. 1 January Johnson put 12,000 into a newly opened business bank account to start a new business. 3 January Bought inventories for 5,200 for cash. 5 January Bought some equipment (non-current asset) for cash for 1,600. 6 January Bought inventories costing 6,000 on credit. 9 January Paid rent for the month of 500. 10 January Paid 480 for fuel and electricity for the month. 15 January Sold inventories for 8,000 cash; the inventories had cost 4,800. 19 January Sold inventories for 7,600, on credit; the inventories had cost 4,600. 21 January Johnson withdrew 2,000 cash for personal use. 25 January Paid 4,000 to trade payables 28 January Received 5,000 from trade receivables Required: i. Post the transactions to the necessary accounts and balance the accounts. (Note: You do not need to prepare a trial balance.) (20 Marks) ii. Prepare an income statement for the month. Assume that there were no prepaid or accrued expenses at the end of the month and ignore any possible depreciation. (10 Marks)