MGL manufactures rain-water storage devices for metropolitan domestic use. Cash Accounts Payable 20,000 20,000 Accounts Receivable 100,000 Retained Earnings 7,000 Inventory (50 units @ $200 each) 10,000 Notes payable (4% p.a., due in 8 years. Interest 100,000 payable 1 July each year) Ordinary shares issued 10,000 Plant and equipment 18,000 Accumulated depreciation - plant and 10,000 equipment Patents-unique manufacturing process 15,000 Artwork 3,000 Overdraft 9,000 The following transactions or events occurred during the year. 1. On 1 December, 2017, MGL paid dividends to shareholders of $ 2,000 2. Interest on notes was paid on schedule 3. Annual insurance for plant and equipment of $2,000 was paid on 30 September, 2017 4. The company recorded annual depreciation on plant and equipment on 31 December, 2017. They used a straight-line method. (Assume salvage value of $1,000) and expected useful life of 4 years 5. The company sold 1,200 units of inventory to customers during the year for $350.00 per unit. (All sales are conducted on credit.) 6. The company manufactured 1,300 units of inventory during the year. 7. The company made payments to creditors of $10,000 8. The company received payments from customers of $54,000 9. The company's CEO purchased artwork from MGL's cash account. The artwork hangs on the living room wall at her holiday home in Double Bay, Sydney. 10. During the year, a competitor invented a manufacturing process that produces almost identical results to MGL. 11. Other information relating to expenses incurred during the year specifically involving the manufacturing processes were: i. Full time factory-line staff salaries: $180,000 ii. Council rates: $11,000 iii. Inputs: $80,000 1. Sales commission: 10% per unit sold 2. Fixed administration salaries: $45,000 Prepare an income statement for the current year Prepare a balance sheet reflecting the current financial position of MGL

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