The following is a statement of financial position for Valencia and Co as at 31 January 2018.

Statement of financial position Valencia & Co as at 31 January 2018

Assets Non-current assets Motor vehicles Accumulated depreciation

Current assets

Inventories Trade receivables Prepaid expenses (insurance) Cash

Total assets

Equity and liabilities Equity Capital Retained earnings

Current liabilities

Trade payables Accrued expenses (wages)

Total equity plus liabilities

82600 -30000 52600

 18600 32700 800 1400 53500 106100 

 42000 32300 74300 

 28200 3600 31800 106100 

2

3

During the year to 31 January 2019 the following transactions took place:

1. The owners withdrew equity in the form of cash of 18,000.

2. Offices were rented at an annual rental of 15,000. During the year, rent of

   18,000 was paid to the landlord.

3. Sales revenue on credit totalled 182,100 (cost of 101,400).

4. Cashsalesrevenuetotalled5,200(costof(2,900).

5. Receipts from credit customers (trade receivables) totalled 175,200.

6. Paymentstocreditsuppliers(tradepayables)totalled114,500.

7. Motor van running expenses paid totalled 10,800. The business uses

   straight line depreciation for non-current assets at a rate of 20% of cost per

   year.

8. Insurance on the premises was paid during the year for the period from 1 May

   2018 to 30 April 2019 and amounted to 2,000. The insurance payable

   expense for the year to 31 January 2019 was 1,800.

9. Wagestotalling35,500werepaidduringtheyear.Attheendoftheyear,the

   business owed 2,200 of wages.

10.Inventories totalling 122,600 was bought on credit.

Required:

a) Prepare the income statement for the year ended 31 January 2019 for Valencia & Co.

(15 marks)

b) Prepare the statement of financial position as at 31 January 2019 for Valencia & Co.