Jim Arnold Photography Studio Jim Arnold has been a photographer since his graduation from high school. On July 1, 2019 he decided to open his own photography firm call Jim's Photos. To start his accounting system, Jim developed the following chart of accounts. Assets Cash Accounts Receivable Office Supplies Photography Supplies Prepaid Insurance Office Equipment Accumulated Depreciation - Office Equipment Photography Equipment Accumulated Depreciation - Photography Equipment Furniture and Fixtures Accumulated Depreciation - Furniture and Fixtures Liabilities Accounts Payable Notes Payable Salaries Payable Owner's Equity Jim Arnold, Capital Jim Arnold, Drawing Income Summary Revenue Photography Revenue Vending Machine Revenue Expenses Salaries Expense Advertising Expense Rent Expense Repairs Expense Insurance Expense Office Supplies Expense Photography Supplies Expense Depreciation Expense - Office Equipment Depreciation Expense - Photography Equipment Depreciation Expense - Furniture and Fixtures Utilities Expense Miscellaneous Expense Jim completed the following transactions during the first month of operations. July: 1 Jim invested $110,000 cash and photography equipment valued at $16,000 1 Purchased office supplies (cash) $7,250 1 Purchased photography supplies on account, $6,700 1 Paid July rent, $4,500 1 Paid for a newspaper ad, $1,520 > 2 Purchased office equipment on account, $8,900 > 2 Paid property insurance for the upcoming year, $4,800 3 Purchased a microcomputer system and software, $9,200 by issuing a note payable. 5 Paid for promotional handouts (advertising) $875 6 Paid miscellaneous expenses, $712 7 Paid salaries of employees, $1600 7 Recorded week's cash received for photo work done, $8,350 > 8 Paid for carpet cleaning (miscellaneous expense), $720 9 Recorded photo work done for a customer on account, $6,855 9 Purchased additional photography supplies on account, $5,700 > 10 Purchased additional photography equipment (cash), $6,900 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 $1,000 monthly. Received $500 as an advance payment 11 Purchased furniture for the lobby area, $4,900. Paid cash in full 12 Paid cash for overhead lighting fixtures, $5,100 > 15 Recorded second week's cash received for photo work done, $8,570 > 15 Paid weekly salaries $1,600 17 Jim withdrew cash for personal use, $2,750 18 Paid for TV advertising, $1250 19 Paid for repair to equipment, $821 19 Collected $6,000 for the photo work done on account on the 9th 22 Recorded third week's cash received for photo work done, $7,045 22 Paid weekly salaries, $1,600 pecial wedding photo session for a customer on credit, $3,550 28 Recorded fourth week's cash received for photo work done, $6,995 > 29 Paid weekly salaries $1,600 > 30 Paid water bill for July $943 > 30 Paid utility bill for July $3,095 31 Made a $4,600 payment on the note for the microcomputer purchased on July 3 31 Made a payment for the office equipment purchased on account, $7,300 31 Made a payment on the photography supplies purchased on account, $3,600 31 Wrote a business check to pay for Jim's home phone bill, $1,250 31 Southside Food Vendors reported a total of $12,000 of vending machine sales for July. Ten percent of these sales are $1,200. Since $500 had already been received and recorded in July, Jim received the $700 owed. Directions 1 Journalize each of the transactions for July. 2 Post the journals entries to the ledger 3 Assume for the purposes of the problem that Jim has a one-month accounting period. Data for adjustments as follows: a. Office supplies on hand, $1,250 b. Photography supplies on hand, $4,750 C. One month of insurance has expired d. Salaries unpaid, three days of a five-day week; weekly salaries are $1,600 e. Depreciation of office equipment, $1,520 f. Depreciation of photography equipment, $1,875 g. Depreciation of furniture and fixtures, $950 4 Journalize adjusting entries and post to the ledger 5 Journalize the closing entries and post to the ledger 6 Prepare an income statement, statement of owner's equity and balance sheet as of July 31 7 Prepare a post-closing trial balance