The following data are obtained from a single entry set of books kept by PKC proprietor of retail store:

January 1 June 30

Cash $ 390 $ 4,110

Notes receivable 2,000 1,200

Accounts Receivable 4,500 8,800

Accrued interest on N/R 120 100

Merchandise inventories 3,800 1,000

Prepaid Operating expense 250 200

Store equipment 3,250 3,000

Notes Payable 1,000 1,200

Accounts Payable 3,500 2,500

Accrued interest on N/P 40 50

Accrued operating expense 270 300

The cash book shows the following information:

Balance January 1 $ 1,500

Receipts: Accounts receivable $ 4,850

Notes Receivable 1,500

Interest income 150 6,500

8,000

Payments: Accounts payable $ 5,250

Notes payable 800

Interest expense 155

Operating expenses 1,650

Withdrawals 600 8,455

Balance, March 31 ($ 455)

Required:

1. Calculate net income or loss for the six-month for the period by considering change in capital. (4)
2. Compute sales to prepare the income statement. (4)