On January 1, Pulse Recording Studio (PRS) had the following account balances.

Accounts Payable	$	8,400
Accounts Receivable		6,800
Accumulated DepreciationEquipment		6,500
Cash		3,760
Cash Equivalents		1,680
Common Stock		10,700
Deferred Revenue		3,900
Equipment		29,400
Notes Payable (long-term)		12,200
Prepaid Rent		2,430
Retained Earnings		2,900
Supplies		530

The following transactions occurred during January.

1. Received $2,420 cash on 1/1 from customers on account for recording services completed in December.
2. Wrote checks on 1/2 totaling $4,280 for amounts owed on account at the end of December.
3. Purchased and received supplies on account on 1/3, at a total cost of $200.
4. Completed $3,900 of recording sessions on 1/4 that customers had paid for in advance in December.
5. Received $4,850 cash on 1/5 from customers for recording sessions started and completed in January.
6. Wrote a check on 1/6 for $4,040 for an amount owed on account.
7. Converted $1,040 of cash equivalents into cash on 1/7.
8. On 1/15, completed EFTs for $1,390 for employees salaries and wages for the first half of January.
9. Received $2,940 cash on 1/31 from customers for recording sessions to start in February.

Required:

1. Prepare an income statement for the period ended January 31.
2. Prepare a bank reconciliation.
3. Prepare a classified balance sheet as of January 31.
4. Calculate the current ratio at January 31.
5. Indicate whether PRS has met its loan covenant that requires a minimum ratio of 1.2
6. Calculate the net profit margin at January 31.
7. Indicate whether PRS has achieved its objective of 10%