Question 3 - 15 marks Xiang Insurance Agency Ltd. prepares monthly financial statements. Presented below is an income statement prepared for the month of July 20x8. XIANG INSURANCE AGENCY LTD. Income Statement Month Ended July 31, 20x8 Revenues Commission revenue $60,000 Expenses Salaries expense $5,000 Advertising expense 800 Rent expense 4,200 Depreciation expense 2,800 Total expenses 12,800 Income before income tax 47,200 Income tax expense 0 Net income $47,200 When the income statement was prepared, the company accountant forgot to take into consideration the following information: 1 A utility bill for $800 was received on the last day of the month for electric and gas service for the month of July. 2 The company sold a life insurance policy on July 20 to a client for a premium of $28,000. The agency billed the client for the policy and is entitled to a commission of 15%. 3 Supplies on hand at the beginning of the month were $700. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at July 31. 4 The agency purchased a used car at the beginning of July for $16,800 cash. The estimated useful life of the car is 4 years. 5 The agency pays its employees each Friday. Weekly payroll (5 days) is $7,200. July 31 falls on a Tuesday. 6 Estimated income tax expense owing was $10,000. Instructions Prepare a corrected income statement.