Jim Arnold had been a photographer since his graduation from high school several years ago. On January 1, 20XX he decided to open his own photography firm, called ARNOLD'S PHOTOS. TO start his accounting system, Jim developed the chart of accounts shown below. ARNOLD'S PHOTOS CHART OF ACCOUNTS ASSETS OWNER'S EQUITY 111 CASH 311 JIM ARNOLD, CAPITAL 112 ACCOUNTS RECEIVABLE 312 JIM ARNOLD, DRAWING 113 OFFICE SUPPLIES 114 PHOTOGRAPHY SUPPLIES REVENUE 115 PREPAID INSURANCE 411 PHOTOGRAPHY REVENUE 120 OFFICE EQUIPMENT 412 VENDING MACHINE REVENUE 121 ACC. DEPR. - OFFICE EQUIPMENT EXPENSES 130 PHOTOGRAPHY EQUIPMENT 511 SALARIES EXPENSE 131 ACC. DEPR. - PHOTO EQUIPMENT 512 ADVERTISING EXPENSE FURNITURE & FIXTURES 513 RENT EXPENSE 141 ACC. DEPR. - FURNITURE & FIXTURI 514 LIABILITIES INSURANCE EXPENSE 211 ACCOUNTS PAYABLE 516 OFFICE SUPPLIES EXPENSE 212 SALARIES PAYABLE 517 PHOTOGRAPHY SUPPLIES EXPENSE 250 NOTES PAYABLE, LONG TERM 518 DEPRECIATION EXPENSE 519 UTILITIES EXPENSE 520 MISCELLANEOUS EXPENSE 140 515 Directions: 1. The ledger should include each of the accounts from the Chart of Accounts, inspect the leger. 2. Journalize and post each of the transaction in January. 3. At the end of the month, prepare an Unadjusted Trial Balance on the worksheet provided. 4. Using the following month end data, complete the worksheet. 5. Adjustments: (a) Office supplies on hand, $850. (b) Photography supplies on hand, $5,500. (c) Photography Revenue earned but unbilled as of January 31, $2,500 (d) Insurance expired, $300. (e) Salaries unpaid, 2 days of the weekly salaries of $1,400. (1) Depreciation of Office Equipment, $190, Photography Equipt. $275, and F&F $75. 6. Prepare the Financial Statements for the month of January 20XX including an Income Statemen Statement of Owners' Equity, and a Classified Balance Sheet. 7. Journalize and post the Adjusting Entries. 8. Journalize and post the Closing Entries. 9. Prepare a Post-Closing Trial Balance. 10. Answer these questions: How should the owner feel about his first month of business? Why did cash decrease by so much, when the Net Income (Loss) is not that amount? Jim completed the following transactions during the first month of operations: Jan. 1 Jim invested $40,000 cash and photography equipment with a FMV of $20,000, and photographic supplies which cost $3,000, into the business. 1 Purchased office supplies for cash, $1,300. 1 Purchased more photography supplies on account, $6,700. 1 Paid January rent on a studio, $1,700. 1 Paid for a newspaper ad, $500. 2 Purchased office equipment on account, $6,750. 2 Paid business insurance for the upcoming year, $3,600. 3 Purchased a computer system and software, $3,200, by issuing a 3 year note payable. 5 Paid for promotional handouts, $150 6 Paid miscellaneous expenses, $175. 7 Paid weekly salaries of employees, $1,400 7 Recorded week's cash receipts for photo work, $1,350. 8 Paid for carpet cleaning (a misc. expense). $75. 9 Recorded photo work done for a customer on account, $855. 9 Purchased additional photography supplies on account, $1,200. 10 Entered into a contract with Southside Food Vendors to place vending machines in the waiting room. Jim is to receive 10% of all sales, with a minimum of $200 monthly, Jim received $200 as an advance payment. 11 Purchased furniture for the lobby area, $1,700. Paid cash in full. 12 Paid cash for the installation of overhead lighting fixtures, $900. 15 Recorded second week's cash receipts for photo work, $2,170. 15 Paid weekly salaries $1,400. 17 Jim withdrew cash for personal use, $800. 19 Collected $500 on account. 22 Recorded third week's cash receipts for photo work, $2,045. 22 Paid weekly salaries $1,400. 23 Photographed a special wedding photo session for customer on account, $2.550 28 Recorded fourth week's cash receipts for photo work, $1.995. 29 Paid salaries of employees, $1,400. 30 Paid water bill for January, $75. 30 Paid electric bill for January, $1,095 31 Made a $500 payment on the note for the computer purchased on January 3. 31 Paid on account, $3,000 31 Wrote a business check to pay the bill for Jim's home phone, $310. 31 Southside Food Vendors reported a total of $2,200 of vending machine sales for January. Since the business had already received $200, Southside paid the remaining amount due for January