Tree Gals, Inc. is a small nursery business that specializes inplanting trees and shrubs for homeowners. They are a brand-newbusiness, but have several years of experience in the industry.Tree Gals obtained start-up capital from family members in exchangefor ownership interest in the company. On December 1, a total of$65,000 was raised by issuing 10,000 shares of stock. An additional$30,000 was borrowed from their hometown bank, also on December l.The principal must be repaid at the end of two years, along with 6percent interest annually, which accrues as time passes. Also onDecember l, Tree Gals took delivery of, and began using in thebusiness, two previously owned Ford F-250 pick-ups for which itpaid cash of $21,000 each. These trucks are expected to last forfive more years, and the best guess is that each will be worth$6,000 at the end of the five-year period. Tree Gals hired twoemployees to do the planting: Anne and Deborah. Anne is extremelyknowledgeable, but a bit taciturn. Deborah is generally ebullientand has a lovely accent, and so her services were in high demand bythe customers of her former employer. As a result of herpopularity, Deborah negotiated a deal with Tree Gals that she willbe paid in advance for every job (i.e., at the time the job isscheduled). Anne is happy to follow the more generally acceptedmethod of being paid after she does the work. The employees furnishtheir own tools (i.e., shovels and picks). Tree Gals decides tocharge $75 for planting each tree. The worker planting the tree(i.e., Anne or Deborah) will receive $20 per tree as her wage. OnDecember 18, two clients came into the office to arrange to havetrees planted on their property. The first client, Ms. Himantnans,was insistent that her 20 trees/shrubs be planted the next day, asit was critical that the work be completed before the holidays.Furthermore, she insisted that Anne do the planting, as she hadheard Deborah was the chatty type and she did not want to paysomeone to chat. In addition, she insisted that Anne must arrive ather house before the clock struck 8:00 a.m., or the order wascancelled. Finally, Ms. Himantnans insisted that she be billed forthe job and allowed to pay in three weeks, The second client, Ms.Favored, wanted 30 trees/shrubs planted. She was flexible aboutwhen the work would be completed, as long as it was scheduled afterthe first of the year. However, she did ask that Deborah do thework, as she had heard wonderful things about her charming mannerfrom her friend. Ms. Favored insisted on paying in advance, andimmediately wrote a check for the total amount. Tree Gals scheduledDeborah to do the work in four weeks and, per their agreement, paidher immediately. Anne arrived at Ms. Himantnans's home at 7:59 a.m.on December 19 and completed the planting to her satisfaction. Hernext payday is January 5. Ms. Himantnans paid promptly on January8. Deborah performed the work for Ms. Favored on January 15. Bothcustomers promised to recommend Tree Gals, Inc. to their friends.Required Prepare a balance sheet, income statement, and statementof cash flows (using the direct method) as of December 31.