Question

Question 6

These financial statement items are for Sandhill Corporation at year end, July 31, 2018:

Operating expenses	$32,500		Interest payable		$ 700
Salaries expense	44,700		Supplies expense		1,300
Unearned revenue	12,000		Dividends declared		14,000
Utilities expense	2,800		Depreciation expense		3,900
Equipment	57,100		Retained earnings, Aug. 1, 2017		21,440
Accounts payable	4,920		Rent expense		11,000
Service revenue	113,100		Income tax expense		5,700
Rent revenue	19,500		Supplies		1,600
Common shares	27,000		Held for trading investments		24,500
Cash	5,560		Bank loan payable (due Dec. 31, 2018)		21,300
Accounts receivable	18,600		Interest expense		2,400
Accumulated depreciation—equipment	5,700

Additional information:
Sandhill started the year with $15,000 of common shares and issued additional shares for $12,000 during the year.

SANDHILL CORPORATION Income Statement

Answer 1

		Income Statement
		For the year ending July 31,2018
	Revenue
	Service revenue					113,100
	rent revenue					19,500
	total revenue					132,600
	Expenses
	operating expense				32,500
	Salaries expense				44,700
	Utilities expense				2,800
	Supplies expense				1,300
	Depreciation expense				3,900
	Rent expense				11,000
	interest expense				2,400
	total expense					98,600
	Net operating income before tax					34,000
	income tax expense					5,700
	Net operating income					28,300