Question

The following is a list of accounts, in alphabetical order, for Sandhill, Inc. at July 31, 2018:

Accounts payable		$ 9,800		Income tax expense		$ 2,900
Accounts receivable		14,000		Insurance expense		1,700
Accumulated depreciation—equipment		20,800		Interest expense		3,600
Bank loan payable, due 2020		39,100		Prepaid insurance		200
Cash		5,900		Rent expense		9,100
Common shares		37,000		Repairs and maintenance expense		10,400
Depreciation expense		9,400		Retained earnings		20,800
Dividends declared		800		Salaries expense		25,500
Equipment		98,600		Salaries payable		700
Held for trading investments		22,000		Service revenue		75,900

Additional information:
All accounts have a normal balance. During the year, the company issued common shares for $ 11,000.

Prepare a statement of changes in equity for the year. (If an amount reduces the account balance then enter with negative sign or parentheses e.g. (45) or –45.)

SANDHILL INC. Statement of Changes in Equity Choose the accounting periodChoose the accounting period  July 31, 2018Year Ended July 31, 2018Month Ended July 31, 2018
		Common Shares		Retained Earnings		Total Equity
Select an opening statement nameSelect an opening statement name  RevenuesTotal RevenuesExpensesTotal ExpensesIncome Before Income TaxNet Income/(Loss)Income From OperationsDividends DeclaredBalance, August 1, 2017Balance, July 31, 2018Issued Common Shares		$ Enter a dollar amount		$ Enter a dollar amount		$ Enter a total amount for this row
Select a statement itemSelect a statement item  RevenuesTotal RevenuesExpensesTotal ExpensesIncome Before Income TaxNet Income/(Loss)Income From OperationsDividends DeclaredBalance, August 1, 2017Balance, July 31, 2018Issued Common Shares		Enter a dollar amount		Enter a dollar amount		Enter a total amount for this row
Select a statement itemSelect a statement item  RevenuesTotal RevenuesExpensesTotal ExpensesIncome Before Income TaxNet Income/(Loss)Income From OperationsDividends DeclaredBalance, August 1, 2017Balance, July 31, 2018Issued Common Shares		Enter a dollar amount		Enter a dollar amount		Enter a total amount for this row
Select a statement itemSelect a statement item  RevenuesTotal RevenuesExpensesTotal ExpensesIncome Before Income TaxNet Income/(Loss)Income From OperationsDividends DeclaredBalance, August 1, 2017Balance, July 31, 2018Issued Common Shares		Enter a dollar amount		Enter a dollar amount		Enter a total amount for this row
Select a closing statement nameSelect a closing statement name  RevenuesTotal RevenuesExpensesTotal ExpensesIncome Before Income TaxNet Income/(Loss)Income From OperationsDividends DeclaredBalance, August 1, 2017Balance, July 31, 2018Issued Common Shares		$ Enter a total amount for this column		$ Enter a total amount for this column		$ Enter a total amount for this row

Answer 1

• Statement of changes in Equity

SANDHILL INC.
Statement of Changes in Equity
Year Ended July 31, 2018
	Common	Retained	Total
	Shares	Earnings	Equity
Balance August 1, 2017	$                                   26,000.00	$                  20,800.00	$                                    46,800.00
Issued Common Shares	$                                   11,000.00	$                                  -	$                                     11,000.00
Net Income/(Loss)	$                                                  -	$                  22,700.00 [calculated below]	$                                     22,700.00
Dividends Declared	$                                                  -	$                      (800.00)	$                                        (800.00)
Balance, July 31, 2018	$                                   37,000.00	$                  42,700.00	$                                     79,700.00

• Calculation of Net Income

Service revenue		$              75,900.00
Expenses:
Income tax expense	$      2,900.00
Insurance expense	$      1,700.00
Interest expense	$      3,600.00
Rent expense	$      9,100.00
Repairs and maintenance expense	$    10,400.00
Salaries expense	$    25,500.00
Total Expenses		$              53,200.00
Net Income		$              22,700.00