Problem 2 (ACs 3.1, 3.2 & 3.3) Xara Clothes has the following income statement : Xara Clothes Income Statement 2017 INCOME Sales E 31,442.00 Cost of Goods Beginning Inventory value E 8,010.00 Manufacturing cost E 19, 159.00 Less Ending Inventory value E 8,793.00 Cost of Goods Sold 3 18,376.00 Gross Profit E 13,066.00 Non-Operating Income Interest Income 600.00 Total Non-Operating Income f 600.00 Total INCOME E 13,666.00 EXPENSES Operating Expenses Accounting and Legal 1,107.00 Advertising 900.00 Depreciation 1,202.00 Insurance 1,041.00 Maintenance and Repairs 923.00 Office Supplies 325.00 Rent 1,268.00 Salaries and Wages 925.00 Telephone & Broadband 118.00 Utilities 565.00 Web Hosting and Domains 165.00 Total Operating Expenses E8,539.00 Non-Recurring Expenses Furniture and Equipment E 1,052.00Total Non-Recurring Expenses E 1,052.00 Total EXPENSES E 9,591.00 Net Income Before Taxes 4,075.00 Income Tax Expense 815.00 NET INCOME E3,260.00 Xara Clothes Statement of financial position at 31 Dec 2017 ASSETS Current Cash E 1,704.00 Inventory of Office Supplies E 120.00 Inventory (Raw Materials, Work In Progress, Finished Goods) E 8.793.00 E 10,617.00 Non-current assets Office Equipment E 3,785.00 Less: Accumulated depreciation E 1,202.00 E 2,583.00 E 13,200.00 Equity Owner Capital E 6,000.00 Profits/loss E 3,260.00 E 9,260.00 LIABILITIES Current Liabilities Short-term loan E 1,940.00 Non- Current Liability Long-term loans E 2,000.00 Total Liabilities + Equity E 13,200.00