Working backward to the balance sheet at the beginning of the period. (Problems 35 through 37 derive from problems by George H. Sorter.) The following data relate to the Prima Company.

(4) Purchases of merchandise during the period, all on account, were \(\$ 127,000\). All "Other Operating Expenses" were credited to Prepayments.
Prepare a balance sheet for January 1, Year 2. (Hint: Set up T-accounts for each of the accounts in the trial balance, and enter the ending balances in the T-accounts. Starting with information from the income statement and statement of cash receipts and disbursements, reconstruct the transactions that took place during the year and enter the amounts in the appropriate T-accounts.)

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EXHIBIT 3.20 CREATIVE PHOTOGRAPHERS, INC. Adjusted, Preclosing Trial Balance June 30, Year 2 (Problem 34) Accounts Payable Accounts Receivable $ 10,923 $ 11,700 Accumulated Depreciation 5,985 Advertising Expense Cameras and Equipment 4,500 46,500 Cash 8,982 Common Stock 30,000 Depreciation Expense-Cameras and Equipment 540 Depreciation Expense-Furniture and Fixtures...... 315 Electricity Expense 900 Equipment Repairs Expense. 540 Furniture and Fixtures 28,800 Insurance Expense 990 Photographic Supplies Expense 5,850 Photographic Supplies on Hand 10,170 Prepaid Insurance 810 Rent Expense 4,275 Retained Earnings 42.414 Revenue Commercial Photography 54,270 14.040 Revenue Printing Service Salaries Expense Telephone Expense 32,400 360 $157,632 $157,632