1. At the end of 2020, the company's general ledger indicated the following balances: Debits Credits Cash $ 67,000 Accounts Payable $ 36,000 Accounts receivable 35,500 Note payable 57,600 Equipment (net) 115,000 Common stock 25,000 Retained earnings 98,900 Total $ 217,500 $ 217,500 2. Tuition revenue in December 2020 was $71,000, and tuition revenue budgeted for January 2021 is $100,000. 3. 4. 5. 6. 7. 50 percent of tuition revenue is collected in the month earned, and 50 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $55,000; rent, $5,000; depreciation on equipment, $8,000; utilities, $2,200; other, $880. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $36,000 payable at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. The company intends to purchase $50,000 of computer equipment in January 2021. The anticipated $8,000 per month of depreciation (see number 4) reflects the addition of $2,200 of monthly depreciation related to this purchase. The note is at 14 percent per annum and requires monthly interest payments of $672. The payments are made on the 20th of each month. The principal must be paid in February 2022. 8. The tax rate is 20 percent. SUPPORT Budgeted Income Statement For the Month Ended January 31, 2021 +A Total expense Depreciation Tuition revenue Rent Interest expense Other expenses Net income/(loss) Utilities Salaries Income before taxes Taxes on income +A GA