During the month of February, the agency engaged in the following transactions:

Feb. 1 Received an additional investment of cash from Joan Miller, $6,000.

Feb. 2 Purchased additional office equipment with cash, $800.

Feb. 5 Received art equipment transferred to the business from Joan Miller, $1,400.

Feb. 6 Purchased additional office supplies with cash, $80

Feb. 7 Purchased additional art supplies on credit from Taylor Supply Company, $500.

Feb. 8 Completed the series of advertisements for Marsh Tire Company that began on January 31, and billed Marsh Tire Company for the total services performed, including the accrued revenues that had been recognized in January of $200 (see accounts receivable). The total bill is $800.

Feb. 9 Paid the secretary for two weeks' wages, $600.

Feb. 12 Paid the amount due to Morgan Equipment for the office equipment purchased last month $1,500

Feb. 13 Accepted an advance fee in cash for artwork to be done for another agency, $1,800.

Feb. 14 Purchased a copier from Morgan Equipment for $2,100, paying $250 in cash and agreeing to pay the rest in equal payments over the next five months.

Feb. 15 Performed advertising services and accepted a cash fee, $1,050.

Feb. 16 Received payment on account from Ward Department Stores for services performed last month, $2,800.

Feb. 19 Paid amount due for the telephone bill that was received and recorded at the end of January , $70.

Feb. 20 Performed advertising services for Ward Department Stores and agreed to accept payment next month, $3,200.

Feb. 21 Performed art services for a cash fee, $580.

Feb. 22 Received and paid the utility bill for February, $110. Paid the secretary for two weeks' wages, $600.

Feb. 26 Paid the rent for March in advance, $400.

Feb. 27 Received the telephone bill for February, which is to be paid next month, $80.

Feb. 28 Paid out cash to Joan Miller as a withdrawal for personal living expenses, $1,400.

At the end of February, adjustments are made for the following:

a. One month's prepaid rent has expired.

b. One month's prepaid insurance has expired, $40.

c. An inventory of art supplies reveals $720 of supplies are still on hand on February 28th.

d. An inventory of office supplies reveals $300 in office supplies have been used in February.

e. Depreciation on the Art equipment for February is calculated to be $90.

f. Depreciation on the Office equipment for February is calculated to be $100.

g. Art services performed for which payment has been received in advance total $1,400

h. Advertising services performed that will not be billed until March total $340.

i. Three days' worth of secretarial wages had accrued by the end of February.

Question

1. Prepare in good form an income statement for the month of February 2010

The following are the balances in the accounts for Joan Miller Advertising Agency as of January 31, 2010 $1,720 Accounts Receivable 1300 Art Supplies Office Supplies 400 Prepaid Rent Prepaid Insurance Art Equipment Accumulated Depreciation, Art eq. Office Equipment Accumulated Depreciation -Office Eq. Accounts Payable 600 Unearned Art Fees Wages Payable 180 Joan Miller, Capital $14.660 14,660 Tota