You have started your second year of the BCom at York University and decided to start your own business with your passion: be a DJ at parties. A family friend that works as a lending officer in one of Canada's largest banks explained to you how the business plan has to be presented so you can get some financing.

-On January 1^st you set up a company-Music on Wheels Ltd with a capital of 50,000 shares at $1 each. A lawyer produced all the needed paperwork. On the same day, you submitted the business plan to the bank and were successfully granted a start-up loan of $23,750, you deposited $14,250 of your personal savings and start-up loan of $23,750 in the newly opened chequing account of your company. On January 1^st, you transfer ownership of your van to the company. The van has a fair market value of $4,750 and is estimated to last for 50 months and then be discarded.

-On January 1^st you purchase music equipment for $17,100 and $570 worth of music files from the same shop. Half was paid in cash, and the remaining half is paid on Feb 15^th. The music equipment will be used for 60 months with no resale value at the end, while the music files are expensed immediately.

-On January 1^st you sign the insurance contract for the van and the music equipment. The insurance premium for the van is $2,280 per year and for the equipment is $1,140 per year with payment at a latter date.

-On January 1^st you rented a warehouse to store musical equipment for one year, starting on that day, and paid $5,700 in advance.

-Performed service as the DJ of a fundraising event of a large international charity on Jan 10^th. Got a cheque of $1,900 for your service and $2,850 on account to be collected on Jan 31^st.

-On January 14^th, paid a local radio 90 days (16 days in January, 28 days in February, 31 days in March, and 15 days in April) of advertising for $855 starting on January 16^th. And on the same day, paid $855 of insurance for the months from January to March (whole month coverage for January, February, and March).

-On January 17^th, provided the music for three small events. One promised to pay the $760 on Feb 7^th, the other will pay the $760 by the end of January, while the third event of $950 will be paid on March 2^nd.

-On January 19^th, hired a car painter to freshen up the look of the van (this will not change the value or the useful life of the van). The work is completed by Jan 21^st. Paid $190 on Jan 19^th, paid $475 on Feb 19^th, and the rest $380 on March 19^th.

-On January 20^th, collected and paid for 800 pieces of nicely designed brochures. Total Cost $760. Distributed 150 brochures in January, 250 brochures in February, and 300 brochures in March.

-On January 23^rd, two events were served. Provided services in a morning event at a local church and collected $570 for your service. And one big event was serviced in the afternoon, the bill of $3,800 was paid 50% before the beginning of the event and the rest will be paid in 30 days.

-On January 28^th, received the bill from the lawyer that helped you to set up the company for $1,425 payable by Feb 15^th. (Hint: treat this as an asset). You have paid the bill on time.

-On January 29^th, received a deposit of $1,710 for servicing a fundraising event in February, and received a deposit of $2,850 for servicing a wedding in March.

-On January 31^st, collect $2,850 from the event on January 10^th and got a phone call indicating the $760 owed for the January 17^thevent will be paid sometime in February.

-Bank changes the monthly service fee of $95, and in addition, the bank charges 6% per year for interest on a start-up loan, both fees will be automatically deducted from the chequing account at the end of each month.

-Declared dividends to yourself of $100 per 1,000 shares on January 31^st, all dividends declared in the current month will be paid in the next month.

Required:

1. Prepare the statement of proof of cash by January 31^st.
2. Prepare the Income Statement (accrual accounting) for the Month of January.
3. Prepare the Balance Sheet (accrual accounting) as of January 31^st