1.Create an income statement for the month of July in good form, including balances. Tax is 30% of taxable income.

2.Create an balance sheet ending July 31^st. Please insert appropriate category titles.

3.Why do I use "for the month of July" for the income statement and "ending July 31^st" for the balance sheet?

Accounts payable

5,800

OPERATING EXPENSES:

Accounts receivable

3,000

OPERATING INCOME

Accumulated depreciation-Furniture

(4,000)

Prepaid insurance

3,500

Accrued expense

2,800

Retained earnings

11,900

Additional paid-in capital

4,500

SALES REVENUE

53000

Advertising expense

1100

Short- term loans

7,000

Bad debt expense

1800

Tax (30%)

Cash

$4,500

TAXABLE INCOME (or EBT)

Common Stock

15,000

TOTAL ASSETS

COST OF GOODS SOLD

22,000

TOTAL CURRENT ASSETS

Current portion of mortgage

3,000

TOTAL CURRENT LIABILITIES

Depreciation expense

300

TOTAL LIABILITIES

EBIT

Furniture

25,000

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

GROSS PROFIT

TOTAL STOCKHOLDERS' EQUITY

Insurance expense

700

Utilities expense

3575

Interest expense

400

Wages & benefits

18600

Inventory

5,000

Investment income

2500

Land

80,000

Mortgage

67,000

NET INCOME

NET PPE