Chapter 1, Problem 1.34E

Use the following information to answer Exercises E1-34 through E1-36.

The assets, liabilities, and equities of Drought Design Studio have the following balances at December 31, 2016. The retained earnings was $31,000 at the beginning of the year with common stock of $20,000 and dividends of $55,000 at year end.

Notes Payable	$ 9,800
Rent Expense	22,000
Cash	3,100
Office Supplies	4,500
Salaries Expense	62,000
Property Tax Expense	1,200
Office Furniture	$ 55,200
Utilities Expense	6,500
Accounts Payable	3,700
Service Revenue	159,200
Accounts Receivable	10, 200
Miscellaneous Expense	4,000

Preparing the income statement

Prepare the income statement for Drought Design Studio for the year ending December 31, 2016.