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