4 Pi Seeds Ltd is a small company which has been trading for several years. The end of the company's financial year is 31 March. The following is the company's Statement of Financial Position as at 1 April 2019, the start ofits mostrecent financial year: Pi Seeds Ltd Balance Sheet as at 1 April 2019 Non-current assets Equipment Motor vehicles Cost 660,000 269,000 929,000 Depreciation 160,000 88,500 248,500 Net 500,000 180,500 680,500 Current assets Inventory Trade receivables Prepaid expenses Cash and bank 45,000 98,400 64,600 208,000 888,500 Total assets Non-current liabilities 10% Loan 150,000 Current liabilities Trade payables Corporation tax Accrued expenses 63,600 22,200 Total liabilities 85,800 235,800 Net assets 652,700 Equity Issued share capital, 1 ordinary shares Retained profits 400,000 252,700 652,700 The following is a summary of the company's cash and bank transactions for the year ended 31 March 2020: Pi Seeds Ltd Cash Flows for the year ended 31 March 2020 Receipts Cash received from customers 2,180,500 2,180,500 Payments Rent paid Motor vehicles Cash paid to suppliers Wages and salaries paid Utility bills paid Other expenses Interest paid Corporation tax paid Directors' salaries 75,000 41,000 1,358,000 305,300 86,400 68,300 11,250 22,200 96,300 2,063,750 Cash at 1 April 2019 Increase in cash Cash at 31 March 2020 64,600 116,750 181,350 The following additional information relates to the financial year ended 31 March 2020: Sales totalled 2,505,800 for the year. All sales were made on credit. Irrecoverabledebts of34,200 as at 31 March 2020 are to be written off. Invoices received from suppliers totalled 1,412,000 for the year. Returns totalling 12,000 were made to suppliers and full credit was received for these. Unsold goods as at 31 March 2020 were valued at 56,400. Depreciation is charged on a full year basis on non-current assets as follows: Equipment: 30% reducing balance method Motor vehicles: 20% straight line method. There were no prepaidor accrued expenses as at 1 April 2019. The following operating expenses were accrued as at 31 March 2020: Salaries: 34,700 Utility expenses: 13,600 The company uses premises which arerented. The rentis 60,000 a year. Corporation tax for the year ended 31 March 2020 is estimated to be 30,624. The company did not pay any dividends during the year. Required Prepare the following financial statements: a) TheIncome StatementofPi Seeds Ltdforthe yearended 31 March 2020. (10 marks) b) The StatementofFinancial Position of Pi Seeds Ltd as at 31 March 2020. (10 marks) (Total 20 marks)