Transaction analysis and preparation of financial statementsFlashy Fashions Ltd is a small company in a coastal town. It rents its premises and its sales are all on credit. Ithas only three expenses: cost of goods sold, rent and income tax.At the end of its previous financial year, 30 September 2018, Flashys balance sheet was as follows:FLASHY FASHIONS LTDBALANCE SHEET AS AT 30 SEPTEMBER 2018

Assets$ Liabilities and shareholdersequity$Current assetsCurrent liabilities

Cash800, Accounts payable600,Accounts receivable400, Rent payable700,Inventory900,ShareholdersequityShare capital300,Retained profits500,Total assets2 100Total liabilities and shareholdersequity2 100During the year ended 30 September 2019, the following information was recorded in the companysaccounts.aRevenue from credit sales $10 000.bCollections from customers $9600.cPurchases on credit of inventory for sale $6100.dPayments to suppliers $6300.eCost of goods sold $6400.fRent charged by the landlord $2400.gRent paid to the landlord $2900 (decreasing the liability).hIncome tax payable for the year $350.iCash dividends declared and paid to shareholders $450.Required:1Prepare transaction analysis for each of the above items.2Prepare an income statement and a balance sheet.