Prepare an income statement for 20X7 for the MM based on the format of Exhibit 4.

Below is Exhibit 4 for a reference:

Problem 16 The Milford Motel (MM) has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X7: A Account Balance $ 20,000 $ 300,000 $ 200,000 $ ? $ 40,000 $ 200,000 $1,210,000 A Account Insurance (fire) Rooms department-salaries and wages Food department-salaries and wages Management fees Supplies and other-food department Food purchases Room sales Interest expense Cost of food sold Food sales A A A&G-salaries and wages Franchise fees $ 450,000 $ 120,000 $ 20,000 or The Income Statement 135 Maintenance-contract Information & telecom, systems-contract $ 40,000 $ 30,000 Depreciation Heat, light, & power $ 80,000 Water $ 20,000 Rooms-allowances $ 10,000 Marketing expenses-advertising $ 50,000 Rent expenses 10,000 Supplies and other-room department $ 50,000 Property taxes S $ 40,000 A&G-other expenses $ 60,000 Other information is as follows: 1. The MM borrowed $1,000,000 from the Red Cedar Bank on July 1, 20X7. The annual interest rate is 12 percent. 2. The beginning and ending inventories of food were $7,000 and $5,000, respectively. Food consumed by the food and rooms department employees during the year (free of charge) totaled $1,000 and $3,000, respectively. 3. Fringe benefits and payroll taxes for all employees, excluding free food, are 30 percent of gross salaries and wages. 4. The MM pays an average of 30 percent of its pre-tax income to various governmental units in the form of income taxes. 5. The management fee to be paid to the management company is 2 percent of net room sales and 10 percent of total gross operating profit. 0 0 0. An investment in JMB stock that cost $10,000 was sold for $8,000. 1. A computer that cost $15,000 was sold for $2,000. Its accumulated depreciation at the time of sale was $12,000. Required: "repare an income statement for 20X7 for the MM based on the format of Exhibit 4. The Income Statement 105 hit 4 Summary Income Statement Sum Exhibit 4 N Labor Costs O P Net Revenue Cost of Sales and Related Expenses Other Expenses Profit (Loss) $ monayyy NO monayyy have to pay (payron Operated Departments Rooms Food and Beverage Golf Course and Pro Shop Health Club/Spa Parking Other Operated Departments Miscellaneous Income Total Operated Departments Undistributed Operating Expenses Administrative and General Information and Telecommunications Systems Sales and Marketing Property Operation and Maintenance Utilities Total Undistributed Expenses Totals Gross Operating Profit Management Fees Income Before Non-Operating Income and Expenses Income Rent Property and Other Taxes Insurance Other Total Non-Operating Income and Expenses Earnings Before Interest, Taxes, Depreciation, and Amortization Interest Depreciation Amortization Total Interest, Depreciation, and Amortization Income Before Income Taxes Income Taxes Net Income Less: Equals: Less: Equals: Ending inventory Cost of goods consumed Goods used internally Cost of goods sold van