At the end of her first year of university, Jennifer Davis decided that she should start a business to help finance her education, so she set up her own courier service. She invested savings of $1,300 in the company, which she called Pharoah Ltd. In addition, her parents lent the company $5,700 to help it get started. Since this was a business venture, Jennifer insisted on paying interest on this loan, and her parents agreed to charge a rate of 6% per year. Jennifer then negotiated the purchase of a used car for the business for $8,000. The company made a down payment of $3,900 on the car and financed the remainder of the purchase price at an interest rate of 9% per year. Due to all of the kilometres that would be put on the car while it was used in the courier business, Jennifer estimated that the car could be sold at the end of the summer for $6,300. Pharoah began operations on May 1 and continued until August 31. Although Jennifer did not keep any formal accounting records, at the end of the summer she put together the following additional information related to the business: 1. During the summer, the company made payments of $533 on the car, which included interest of $123 and principal of $410. No payments (of either interest or principal) were made on the loan from her parents. 2. 3. Jennifer paid herself a salary of $1,200 per month for the four months that the business operated. 4. 5. 6. Payments for other operating costs (including advertising, insurance, and gas) totalled $9,700. In addition, there were unpaid bills totalling $150 at the end of August. Courier charges collected from customers totalled $20,600. In addition, customers still owed $200 for services performed in the last two weeks of August. After the close of business on August 31, there was a balance of $8,585 in the company's bank account, plus a "float" of $82 in the car.