Sandhill Co. Balance Sheet December 31, 2021 Cash $13.720 Accounts payable Accounts receivable 21.800 Common stock Allowance for doubtful accounts (810) Retained earnings Inventory 10,180 $44,890 $9.590 21.500 13,800 $44.890 During January 2022, the following transactions occurred. Sandhill uses the perpetual inventory method. Jan. 1 3 8 11 15 Sandhill accepted a 4 month, 8% note from Betheny Company in payment of Betheny's $6,000 account Sandhill wrote off as uncollectible the accounts of Walter Corporation (5400) and Drake Company (5200) Sandbill purchased $17,150 of inventory on account. Sandhill sold for $24,600 on account inventory that cost $16.060 Sandhill sold inventory that cost $750 to Jack Rice for $900. Rice charged this amount on his Visa First Bank card. The service fee charged Sandhill by First Bank is 3% Sandhill collected $23,200 from customers on account Sandhill paid $14,930 on accounts payable. Sandhill received payment in full (S200) from Drake Company on the account written off on January 3, Sandhill purchased advertising supplies for $1,400 cash, Sandhill paid other operating expenses, $3.210. 17 21 24 27 31 Adjustment data: 1. 2 3. 4. Interest is recorded for the month on the note from January 1. Bad debts are expected to be 6% of the January 31, 2022, accounts receivable. A count of advertising supplies on January 31, 2022, reveals that $590 remains unused. The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 3096 to compute the amount: round to whole dollars.) (To record cash received from Drake Company) 27 Supplies 1400 Cash 1400 31 Other Operating Expenses 3210 Cash 3210 31 (1) Interest Recevable Interest Raven 40 (2) Bad Debts Expense Allowance for Doubtful Accounts (3) Supplies Expense 810 Supplies 810 (4) Income Tax Expense Income Taxes Payable January 31, 2022 Debit Credit Cash Inventory Accounts Receivable Allowance for Doubtful Accounts Supplies 2210 Interest Receivable 40 Notes Receivable Accounts Payable Income Tees Payable Common Stock Retained Earning Sa Revenue Interest Reven o 40 Cost of Goods Sold 16810 Service Charge pene 27 Supplier 5130 Other Operating Expert 3210 Income Tax Exp Lad Debts Expense SANDHILL CO. Income Statement January 31, 2022 Sales Revenues $ Cost of Goods Sold Gross Profit Operating Expenses Service Charge Expense $ Supplies Expense Other Operating Expenses Bad Debts Expense Total Operating Expenses Income From Operations Other Expenses and tosses Interest Revenue Income Before Income Taxes Income Tax Expense Net Income/(Loss) SANDHILL CO. Retained Earnings Statement For the Month Ending January 31, 2022 Retained Earnings, January 1 Add Net Income /(Loss Retained Earnings, January 31 Assets Current Assets Cash Inventory Accounts Receivable Less Allowance for Doubtful Accounts Supplies Expense Interest Receivable Notes Receivable Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Income Taxes Payable $ Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity $ V Total Lisbilities and Stockholders' Equity