On July 1, 2020, Sansa started a new business writing, publishing, and selling children's books. Her business was so successful that she quickly her sister Arya to help. Arya took responsibility for printing, binding, and selling books so Sansa could focus on writing and illustrating.

The books are sold for $15 each. Sansa estimates that the direct materials for each book total $4. Arya is paid $20 per hour, plus a commission of $1 per book sold.

Prior to starting her business, Sansa spent $4,000 on equipment which helped her mass produce books. The equipment is expected to last six years and have a salvage value of $400. Sansa is considering selling her equipment for $3,000 to buy better equipment which will allow her to produce a maximum of 10,000 books per year as opposed to 5,000. The new machine would cost $8,000 and last an estimated 9 years (estimated salvage value of $400).

Sansa has rented a small shed for book production. It costs $400 per month. She is wondering if she should rent commercial space for $1,500 a month. This would boost her expected 2021 sales from 6,000 units to 9,000.

In 2021, Arya worked an average 20 hours per week and was employed for 18 weeks. Sansa sold 500 books (all before hiring Arya), and Arya sold 2,500 books. Sansa is wondering if Arya should be working 30 hours a week in 2021. In this case, she would be paid $23 per hour.

Type out Sansa's 2020 Income Statement. Correctly format your work, putting dollar signs at the appropriate places and indicate which numbers should be double-underlined using a "DU" label.

Also, give Sansa some advice on how to account for equipment. Finally, analyze and comment on things Sansa has done well, things she could improve on, and things she should keep an eye on in 2021