This portion of the projection 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 Chapter 2 to update your 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

The supplies were counted and costed out. There are $210 of office supplies remaining.

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 $150 and is due in 30 days

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 $18.

Depreciation on the juicing machine must be recorded. The useful life of the machine is 36 months. (Round depreciation amount to the nearest dollar)

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%.

INFORMATION OF PREVIOUS CHAPTER

The remainder of this project continues with the idea of a company like Sante Smoothies. However, you should choose your own unique company name. Note that the capital and drawings accounts will now be called "YourLastName, capital" and "YourLastName, drawings".

After researching the different forms of business organization, you decide to operate your business as a proprietorship. You then start the process of getting the business running. During the month of December 2021, the following activities take place

DEC 1. You purchase a commercial juicing machine, that costs $1200 using money from your own personal bank account. The machine will be used exclusively in your new smoothie business

7. You open up a business bank account and deposit $800 from your personal bank account.

9. Realizing your initial cash investment won't be enough, you borrow $3500 from your mom, depositing it into the business bank account. As part of the deal, you sign a one-year note payable in the name of the business.

12. In the hopes of generating some revenue, you pay $450 cash to advertise in the community newspaper

17. You buy supplies such as protein powder, cups, straws, and fresh fruit and vegetables, by paying $250 cash.

21. You make and deliver your first batch of smoothies to Fred's Yoga Studio and you leave an invoice for $550 with the studio owner. The invoice is payable within 30 days.

28. A $210 invoice is received for your business cell phone for cell service for the month of December

29. Fred's Yoga Studio pre-ordered another batch of smoothies and paid you a $150 cash advance on that order

30. To celebrate your first month of operations, you buy yourself a $120 new year's present using a business cheque, so that the money comes out of the business bank account.

INSTRUCTIONS

a. Prepare journal entries to record the transactions.

b. Post the entries to general ledger accounts.

c. Prepare a trial balance as at December 31, 2021.