This portion of the project is a continuation from Chapters 1 and 2. Use the information from the previous chapters and follow the instructions below using the ledger accounts you have already prepared. Be sure that you use the solution from Part 1 (Correct Journal Entries and Trial Balance are included) to update your general ledger accounts. Your starting point must be correct to ensure you get to the correct end point. It is now the end of December. Your mother is curious to know if the business has been profitable and if you will need another loan to help finance the business. You would also like to know if you have been profitable during the first month of operation. In order to determine the business' income, you must first make some adjusting entries and you have put together the following additional information: 1 The supplies were counted and costed out. There are $95 of office supplies remaining. 2 On December 31, you delivered smoothies to John's Gym and, although you also delivered the invoice, you had forgotten to record it. The invoice was for $190 and is due in 30 days 3 Because the above order was last-minute, you hired your friend for 4 hours on December 31 to help you make the smoothies. You will pay her on January 3 at an hourly rate of $14. 4 Depreciation on the juicing machine must be recorded. The useful life of the machine is 48 months. (Round depreciation amount to the nearest dollar) 5 The interest on the loan will be paid at the end of the loan term. Assume that 22 days interest has accrued on the loan by December 31 and the annual interest rate is 4%. Instructions: a) Prepare the adjusting journal entries. Round all amounts to the nearest dollar. b) Post the entries to the general ledger accounts. c) Prepare an adjusted trial balance as at December 31, 2020. d) Using the adjusted trial balance, prepare an income statement, statement of owner's equity, and balance sheet for the business' first month of operations. BUAD 111 Project - Part 1 - Solution a. Journal entries: Page 1 Dec. 1 PR 160 310 Equipment Jones, Capital 900 900 7 910 Cash Jones, Capital 110 310 910 9 2,600 Cash Note Payable 110 260 2,600 12 508 330 Advertising Expense Cash 110 330 17 205 Supplies Cash 140 110 205 21 325 AR - Fred's Yoga Sales Revenue 130 410 325 28 Telephone Exp. AP 102 563 210 102 29 Cash Unearned Revenue 120 110 230 120 30 Jones, Drawings Cash 105 320 110 105 Solution: Part 1 Trial Balance Jones Smoothies Trial Balance December 31, 2020 Credit Debit 2,990 325 205 900 Acc # '110 130 140 160 161 210 230 260 310 320 410 508 563 Cash Accounts receivable Supplies Equipment Accum. depreciation Accounts payable Unearned revenue Notes payable Jones, Capital Jones Drawings Sales revenue Advertising expense Telephone expense Totals 102 120 2,600 1,810 105 325 330 102 4,957 4,957