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

1. The supplies were counted and costed out. There are $210 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 $150 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 $18

4. Depreciation on the juicing machine must be recorded. The useful life of the machine is 36 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 general ledger accounts.

c. Prepare an adjusted trial balance as at December 31, 2021.

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.