Arborista, Inc. plants trees and shrubs for homeowners. The trees are purchased from anddelivered by a sister company, Trees-R-Us, Inc.; Arborista specializes in planting.Arborista obtained capital from family members in exchange for common stock, whichprovides an ownership interest to the family members. On December 1, a total of $50,000 wasraised by issuing 10,000 shares of stock. An additional $20,000 was borrowed from their hometownbank, also on December 1. The principal must be repaid at the end of two years, along with 6percent interest annually, which accrues as time passes.Also on December 1, Arborista took delivery of, and began using in the business, twopreviously owned Ford F-250 pick-ups for which it paid cash of $7,000 each. These trucks areexpected to last for five more years, and the best guess is that each will be worth $1,000 at the endof the five-year period.Arborista hired two employees to do the planting: Frank and Francois. Frank is extremelyknowledgeable, but a bit taciturn. Francois is generally ebullient and has a lovely accent, and so hisservices were in high demand by the customers of his former employer. As a result of his popularity,Francois negotiated a deal with Arborista that he will be paid in advance for every job (i.e., at thetime the job is scheduled). Frank is happy to follow the more generally accepted method of beingpaid after he does the work. The employees furnish their own tools (i.e., shovels and picks).Arborista decides to charge $75 for planting each tree. The worker planting the tree (i.e., Frankor Francois) will receive $20 per tree as his wage.On December 18, two clients came into the office to arrange to have trees planted on theirproperty. The first client, Ms. Imaprimadonna, was insistent that her 20 trees/shrubs be planted thenext day, as it was critical that the work be completed before the holidays. Furthermore, she insistedthat Frank do the planting, as she had heard Francois was the chatty type and she did not want topay someone to chat. In addition, she insisted that Frank must arrive at her house before the clockstruck 8:00 a.m., or the order was cancelled. Finally, Ms. Imaprimadonna insisted that she be billedfor the job and allowed to pay in three weeks.The second client, Ms. Bonappetit, wanted 30 trees/shrubs planted. She was flexible aboutwhen the work would be completed, as long as it was scheduled after the first of the year. However,she did ask that Francois do the work, as she had heard wonderful things about his charmingmanner from her friend. Ms. Bonappetit insisted on paying in advance, and immediately wrote acheck for the total amount. Arborista scheduled Francois to do the work in four weeks and, per theiragreement, paid him immediately.Frank arrived at Ms. Imaprimadonnas home at 7:59 a.m. on December 19 and completed theplanting to her satisfaction. His next payday is January 5. Ms. Imaprimadonna paid promptly onJanuary 8. Francois performed the work for Ms. Bonappetit on January 15. Both customerspromised to recommend Arborista, Inc. to their friends.RequiredPrepare a balance sheet, income statement, and statement of cash flows as of December 31