At the end of her first year of university, Michelle Walker decided that she should start a business to help finance her education, so she set up her own courier service. She invested savings of $2,400 in the company, which she called Sandhill Ltd. In addition, her parents lent the company $6,000 to help it get started. Since this was a business venture. Michelle insisted on paying interest on this loan, and her parents agreed to charge a rate of 6% per year. Michelle then negotiated the purchase of a used car for the business for $9,000. The company made a down payment of $2,600 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, Michelle estimated that the car could be sold at the end of the summer for $7,200. Sandhill began operations on May 1 and continued until August 31. Although Michelle 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 compamy made payments of $832 on the car, which included interest of $192 and principar of 5040 2. No payments (of either interest or principal) were made on the loan from her parents. 3. Michelle paid herself a salary of $1,500 per month for the four months that the business operated. 4. Payments tor obber operating costs (including advertising. insurance, and gas) totalled $9,600. In addition, there were unpaid bilis totalline $250 at the end of August. 5. Courier charpos collected from customers totalied $19,500, in addition customers still ewved $250 for secvices performed in the last two woeks of August. the car. At the end of her first year of university, Michelle Walker decided that she should start a business to help finance her education, so she set up her own courier service. She invested savings of $2,400 in the company, which she called Sandhill Ltd. In addition, her parents lent the company $6,000 to help it get started. Since this was a business venture, Michelle insisted on paying interest on this loan, and her parents agreed to charge a rate of 6% per year. Michelle then negotiated the purchase of a used car for the business for $9,000. The company made a down payment of $2,600 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, Michelle estimated that the car could be sold at the end of the summer for $7,200. Sandhill began operations on May 1 and continued until August 31. Although Michelle 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 $832 on the car, which included interest of $192 and principal of $640. 2. No payments (of either interest or principal) were made on the loan from her parents. 3. Michelle paid herself a salary of $1,500 per month for the four months that the business operated. 4. Payments for other operating costs (including advertising, insurance, and gas) totalled $9,600. In addition, there were unpaid bills totalling $250 at the end of August. Courier charges collected from customers totalled $19,500. In addition, customers still owed $250 for services performed in the last two weeks of August. 6. After the close of business on August 31 , there was a balance of $8,780 in the company's bank account, plus a "float" of $88 in the car. Analyze the transactions that affectod the business during the summer. (Enter amounts that decrease occount bolance using either a negotive sign preceding the number es. -45 or parentheses eg. (45). Indicate whether it is Revenues, Expenses or Dividends declared in the last column. In cose if there is no effect then select "Not Applikable'.)
