QuickBooks Online 2023, invoice created from check created from purchase order. Get ready to start moving on up with QuickBooks Online 2023. Here we are in our Get Great Guitars practice file. We started up in a prior presentation using the 30-day free trial. We also have the free QuickBooks Online sample company open if you want the two open at the same time. We suggest using support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. The incognito window or another browser, you can open the incognito window if using Google Chrome by selecting three dots on the browser incognito window and then in the search engine typing QuickBooks Online Test Drive. We're going to be using the sample company to be comparing and contrasting the accounting view, the view that Get Great Guitars is in, and the business view, the view that the sample company is in. If you want to switch between the two views, it's something you can do by going to the cog drop down up top and the switch views down below. We're opening up a couple tabs to put reports in. We're going to right click on the tab up top like we do every time to duplicate it. Right click in the duplicated tab to duplicate it again and then go to the tab to the middle as the one to the right thinking reports on the left tab. And then we want the balance sheet report, which is one of the faves, one of the favorites. If you're in the business view, by the way, the reports are in the business overview reports on the left hand side. We're then going to go to the tab to the right, open up the reports again. This time, the P to the L, the profit to the loss, the income statement, close up the hamburger. Otherwise, no one is the boogie. And then we're going to change the range from 01, 01, 2, 3, 12, 3, 1. No one else calls it the boogie, but I call it the boogie. And we're going to run it just so you just, you know, if you call it the boogie, someone might not know what you're talking about. But I'm going to go to the tab in the middle. We're going to close the boogie and then we're going to scroll up and do the range change. Just going from 01, 01, 2, 3, tab, 12, 31, 2, 3, tab, run it to refresh it. That's what we do every time with the setup process. Okay. Now we're going to create another invoice, but this time we're going to do the whole connection process between an invoice that we created a purchase order and then a check for. So to understand that, let's go back to our flow chart over here and recap what we did in a prior presentation. Now note that if you have inventory, we've got the caveats on the inventory. There's multiple ways you can track inventory. You don't have to track it within the QuickBooks system. You might try to stay on a cash based system if you have just in time inventory and just expense the inventory as you purchase it because you're going to turn around and sell it quickly. Or you might do a periodic system tracking the inventory in an Excel worksheet, tracking the units and then recording just the dollar amounts for the financial reporting purposes. In QuickBooks doing periodic adjustments to adjust to the physical count in your Excel worksheet, for example, that you might do on a nightly, weekly or monthly basis. But here we're using a perpetual inventory system using the full services within QuickBooks to track not only the dollar amounts, but the unit amount of inventory. Inventory will span the vendor cycle where money is going to go out for purchases typically and the customer cycle where we expect money to be coming in for sales. On the purchases side of things, clearly we're buying the inventory and that might start with a purchase order. We would only use the purchase order if we're in a type of situation where we can request the inventory without actually paying for it at that point in time. So you'd have to have a special relationship in that case. If you're buying the inventory or paying for it at the point in time that you've requested, then you would go straight to a check form or a bill. We entered a purchase order in the past and then we would expect, let's imagine we bought our guitars from like China or something like that or we're buying them from Epiphone. And then we expect them to come to us with a box of guitars, the inventory that we're purchasing, being guitars and a bill in it. The bill might say invoice on it because the invoice is what they would create if they were using QuickBooks because we would be their customer from that side of the table. But to us, it would be a physical bill which we could enter into the system with a bill form but aren't required to because we could also just enter it in with a check or expense form, which is what we did in the past. So in other words, once we get the inventory with a bill, physical bill in it, we then have to pay the bill in some way. Either we enter it as a bill, which we'll do in the following month. We'll talk about entering that transaction more of an accrual thing in the following month. Or we can just basically pay the bill right away using a check form or an expense form, which is what we did last time. So that's what we did. Then of course we're going to turn around and sell the inventory at some point in the future. Now we might buy the inventory with no intention to sell it to a particular client. But if we do have a particular client, then we might track the client in this whole stream of transactions. So in other words, if a client came in, they said, I want this particular guitar and we said, okay, we'll buy you that guitar. We don't have it on hand. I'll ask my vendor to buy it for you. We then make a purchase order requesting it on the purchase order. We're going to put who we're buying it for, not because the vendor needs it. Epiphone doesn't need it. But so we can track it so that when we get the guitar, it'll remind us to then turn around and make an invoice. Then when we receive the inventory with a bill on it from Epiphone, we can enter the bill with a bill form or we did last time with a check or expense form. The check form will have the billable item allowing us to check off that it's going to be billable if we so choose. Although we have to be careful of that as we will see so that we can then know that we need to turn around and then create the sales side of things, which would be the invoice for the client that we or customer that we purchased the guitar for. So that's going to be the process. I'm going to go back on over. I'm going to go to the first tab now and then let's go into our expenses side of things to kind of recap what we saw in a prior presentation. We can go into the vendors, for example, and I'm going to close up the hamburger and we had purchase orders for our major vendor that we buy from. That's going to be Epiphone. That's who we buy the guitars from. And then we made these two purchase orders here. So if I go into this purchase order, for example, we go into that purchase order. It's linked to a check form. So that would indicate that we got a receive on it. And we've got these two customers or the customer in these two fields, that customer being Eric Music. So the purchase order is requesting from the vendor, but we put the customer in there. So when I turn around and pay it, it'll remind me to create the invoice. This is the first step, the purchase order. If I close that back out, if I look at this purchase order, then we can see this one didn't have any actual customer fields. Because we just purchased them for the shop closing that back out. And then we made a check form. I believe encompassing or or being populated from both of those purchase orders. So if I go into that, this is us. Now we imagined we got the guitars and with the bill in it and we populated the information that we're just going to pay the bill that we got with a check. But we have these two customers that populated from the purchase order. Then we have this billable option. We then made them a billable here. This is where we got to be very careful because these billable items are neat because they allow us to then create an invoice for this particular customer. But it's not exactly using the items tab the way we might imagine it to do. It's kind of using this billable tab. So it would be like pulling over like a telephone expense that we paid trying to pull that over into the invoice. Let's just take a quick look at where the options are to turn that on in the settings. I'm going to go to the tab to the right right click on it. And let's go up to the the cog up top. And I'm going to go into the accounting and settings. And then we're in the expenses tab on the left hand side. And then in this billing area, it says right here make expenses and items billable. So mark with a default rate or so mark you could mark it up. But usually that's not what we would like to have it be doing is driven by the items not just to mark it up. But then we've got the track billable expense items as income. So it would create another kind of income line item if we use that kind of billable item. But it's not really using the items to drive where it's going. So let me show you what I mean on that. Let's complete this out. And so let's go to I'm going to close this out. I'm going to go back to the first tab. So now we're going to turn around and create an invoice for Eric music. And then it'll ask us to populate with this billable item because that's what the that's what the purpose of it. The billable item is let's close that out. And I'm going to go to the plus button up top and let's make an invoice. And so I'm just going to type in Eric music Eric Eric music and tab. And then so now we have these items pulling over for for the billable items. So let's let's pull them both in. Let's add all of them at all. And so then I'm going to close this out. And so let's go through tapping through it. I'm not going to add an email address. We've got the send the terms that let's go to the date. Let's make the date the 23rd plus button plus button 123 number location. And then everything else is populating like we've seen in a prior invoice is just populating now pulling over from that billable item. Now the tricky thing is that you can see it's kind of linked over here that link indicates that it pulled in from a billable item. It looks like it's pulling in the item perfectly. But if I go down here, notice if I type in an ELP again, then you can see the ELP is actually $500 not the $400. Now if you've worked with the desktop version, the desktop version actually somehow does it the way you would hope. It actually changes the rate to the sales price using the sales item typically, I believe, where it's not doing it here. So you could use this kind of billable item, but then you might want to then then you'd have to check down here and say, OK, the ELP should be $500. And then I would change it to $500. And I believe everything else will still populate properly if you do that. But it's kind of annoying that it puts in the four. And then here I'm going to do the same thing with the EPSH. So an EPSH is $400. So this one, I'm going to change the rate to $400. So and then I'm just going to delete this bottom item so you can see what I did there. I pulled them in, but then I'm going to double check that they're actually doing the right rate because that billable item pulls in the cost, which is typically how that billable function works because you usually use it when you pay for like gas or materials or something like that. So that the materials will then populate over into the invoice as just the amount that you paid for it. Plus you might add a markup if you were doing like a construction process project, for example, everything you paid for. You can then say, when I paid for it, I'm going to pull it into the invoice and at cost. But we don't want to pull it into the invoice at cost here. We want it to use the items to make it the sales price. So it gets a little wonky on that. You got to be really careful with that tool. So there is that. So everything else is an invoice. So I'm going to go down here and change this to the 5% for our generic problem, which you could do here where you can change the math if you want to follow along with our generic problem for the sales tax. And so there it is. So what's this going to do? It's an invoice now. So it's going to increase the accounts receivable for the full amount. $30,450. The other side is going to go to the sales driven, you would think, you know, by the items, but it would be the $29,000 that we charged and then sales tax payables going up a liability $1,450. And then the inventory is going to go down by the amounts driven by the items, hopefully. And then the other side is going to go to cost of goods sold. The net impact on net income is the sales price minus the cost of goods sold. We also have the sub ledger for accounts receivable will be impacted tracking the fact that Eric music is the one that owes us the money. And we're going to try to collect on that. And then the inventory sub ledgers also going to go down by units, hopefully as well driven by these items. Let's check it out and double check that that is indeed the case. Let's save it and close it. Save it and close it. And then we're going to go to the tab to the right. We're going to run it to refresh it because we only work with fresh stuff here. No, no old moldy reports. And then in the accounts receivable going into the aid to the R going into the aid to the R. We've got the invoice here. That looks good. 30,000 450 30,000 450. That's the total down below. So that's the total. Okay. Go back up top. Ex out of that. Scroll up back to our report. Then I'm going to go to the profit and loss, run it to refresh it and then drill it into the cost of goods sold. I'm sorry. Let's go to the sales side first. I'm kind of curious to go to the cost of goods. So I want to get there first, but no sales. Sales first. So there's our invoice with the two line items, the 25,000, the 4,000 doesn't include the sales tax. Just as we would expect closing that back out, scrolling up back to the report back to the middle. Back to the report and then back to the middle tab. And then we want the liabilities. There it is in our sales tax payable for that department because we're going to pay California department and so on. There's the sales tax, which looks correct. Okay. That's a lot of sales tax and scrolling up and we're going to go back. And then we also have the inventory. If I go into the inventories gone down, inventory is the asset. It's going down with an invoice because we sold the inventory. So there's the amount for the invoice 1006. So you've got these dollar amounts separate line items because of the, but it's being driven hopefully by the units of inventory that's being, that are being decreased here by. So if I go into that, those amounts aren't on the actual form, but it's using the items hopefully to be decreasing the inventory because we use that billable thing to do it. Notice there's this invoice is 1006 with two lines. And I have, I have four lines here. Now that I believe that's because QuickBooks is using a flow assumption of first in first out. So that means when they, when they remove the inventory, they have to do it in alignment with what the layers of the flow assumption, even though we haven't changed the price of anything, I think they're tying it out kind of like to when we purchased it. So that why, so that can be a little confusing at first, but I believe that's the rationale for it going back and then tab to the right and the profit or the cost of goods sold here. So there's the cost of goods sold for this side. The net impact on the AR on the income statement is the revenue minus the cost of goods sold and it did put the revenue into the sale of product revenue. Right, which is what we would expect driven by the item. That's what the item would typically tell it to go to. So that looks good. It didn't put it into like a random revenue account for, for the billable item. It's just that dollar amount thing. That's a little weird. So if I go back to the first tab and the AR, the sub, we should have a sub ledger breaking out by cuss by customer. So if I go to the tab to the right, right click on it and duplicate it. So we can see that sub ledger. And we're going to go to the reports and let's close up the bogey and scroll down who owes you. Let's look at the AR aging summary report and check that out as of the end of the year. 12 to 1, 2, 3, 2, 3, run it to refresh it. And so we've got the agents, but I'm just looking at the three customers that add up to the 38 671 50. That should tie out to what's here 38 671 50. We could also track that internally to try to collect on it as we saw with the invoices before in the sales tab, like the customer tab. And then in the customers, which if you were in the business view, by the way, would be in the, the get paid and paid area. And in the get page, you got your customer tab here. So there we have it. And then you can find, you can find the customer or I can sort up top by the open invoices and then it'll give us a list of customers with the open invoices. And I think we're looking at Eric music, I believe. And then you could also go to the sales tab or the invoices and track your invoices that way as well. And the sales tab, you can change this to invoices and possibly you want the open ones to try to collect on the payments. If you were on the business view, by the way, that's in a little bit different area in the bookkeeping tab on the left. Transactions up top. And then you're all sales transactions to find those invoices. All right. So now that we got the idea of it, let's do it again. Ultra base one more time here. So let's check out if I go to the expenses tab on the left hand side and I'm going to close this out and I go down to Gibson. This is another person that we buy guitars from our inventory. So we can see we got the two purchase orders down here for them. So if I go into the purchase order, this being the beginning request form, this purchase order has this customer related to it. The customers, they're not for the benefit of Gibson USA, the person we're purchasing from. But for us, so that when we get the guitars, we can turn around and sell it. Then we entered instead of a bill, which we'll do in the following month. We entered a check this time when we just to pay off the bill as we got the guitars or when we got the guitars. And then in that check form down here, we put it's a billable item and we could link to it here. If we so choose, we added the customer. So now we can turn around and sell it to music stuff store. We have the same caveat to be aware of that it might pull over at cost instead of for the sales price, but it still has that linkage. So let's go close this out plus button. Let's make an invoice for music, music stuff store. Great name. Who came up with that name? That's genius. We're going to say add that. Close this thing up. And then we're going to say this is going to be the 24th on the date due date is going to be 30 days from that because we have the net 30. And then down below once again, it pulled in everything. You got the link, which is nice. But if I type in again down here, G G B G S B. It comes out to 777 so it pulled it in at the cost instead of instead of the sales price. I got to change it to 777 if I want to use that method. I got to close it. I got to close this back out. I want to use the one with a link in it though, because then otherwise it'll if I if I don't use that or delete the link, then it'll try to pull in again when I make another invoice. So you still you can you want to use that one to if you're going to use this method and change the rate typically any case. So there's the link. And so so now we should be good. I'm going to change the sales tax to that 5% as has been our custom for the practice problem. And there it is. What's this going to do invoice counts receivable goes up full amount. The other side goes to revenue driven by the item for the amount we charge the difference sales tax going to a sales tax payable account inventory going down by an amount. Not on the invoice, but the amount that we just saw and changed driven by the item cost of goods sold going up by that same amount net impact on net income revenue minus the cost of goods sold. Also, the sub ledger for receivables is going to be impacted from music stuff store so we can try to collect from music stuff store and the sub ledger for inventory will be impacted for the number and units of inventory for the Gibson SG guitars. We're selling. Let's save it close it and see if that is indeed what happens. You could say it, but let's see if that is what really happens. All right. Let's go to the balance sheet run it to refresh it. So we're working on fresh stuff just like a fresh piece of fruit or something. And then we're going to go into the AR accounts receivable. There it is. If I go into it 818550 looks movie B to the end two letters to explain that one be in that one looks right for the full amount and then going back to our report. The other side's on the profit loss. The income statement run it to refresh it. It should have gone into the sales of product income. So there it is right there music stuff store looks good. That one's on the books for not the including the sales tax, but what we charge the difference of the sales tax at the 38850 should be a payable accounts. Let's go back to our report here. Go back to the balance sheet and then go into the payable account, which is a liability. Mine's for California because we had a California Beverly Hills, but we just did a generic 5%. There is that one that looks correct going back. We know that the AR or that's the inventory is also affected inventory. That's what you're on. Keep your head in the game dang it inventory. So there it is inventories impacted down here. Notice there's two line items of inventory even though we only had one line item on the invoice because I believe of the flow assumption first in first out. So I think that looks good. Those amounts aren't on the actual form because they're driven but driven by the form. If I go to the sales cost of goods sold has those same amounts here. The net impact on net income on the income statement revenue minus the cost of goods sold. Also, if I go to the balance sheet, the accounts receivable should tie out to the sub ledger 46830, which should tie out over here to our sub ledger 46830 breaking it out by customer. I should also be able to find the open invoices on the tab to the left. If I wanted to look in my sales tab and see for example by customer my open invoices so I can try to collect on the invoices and or send statements saying hey you owe us money people. You owe us money. There's four open invoices. This has been a long time. We gave you a guitar. Okay. And then we also have the inventory. I didn't check the inventory last time. We should have a sub ledger for the inventory. So I'm going to right click on the tab to the right. Well, let's just let's just do it on this tab since I don't need this report anymore. Let's go down to the reports on the left. Close up the buggy and type in inventory valuations summary. Let's do that one. And then change the data just to the end of the year 123123 you could do the year to date on the thing. And that gives us our units of inventory. We have a negative GSB that shouldn't happen because we've but so we have we have a phantom guitar because our practice problem sold something that we don't physically have which shouldn't generally be the case but in any case. 9698 is here if I go back to the first tab. 9698. 698. 9698. Read it right. Okay, so I think that's it. Let's take a look at our trustee trial balance going to the tab to the right. And just check our numbers down here as we do every time. Type it in into the reports the trial balance best report for checking the numbers balance sheet on top of the income statement in essence with no subtotals therefore it's nice clean and easy. We're going to go from 010123 to 123123 run it to refresh it. And that's what we have so far if everything ties out that's great if it doesn't try doing a range change expanding the range if there is a change in the numbers when you change the range. Drill down on that number change and then try to change the date possibly which is something that's worth doing in the practice problem but something to be careful of in practice. And at the end of the entering the first month of data we will run transaction detail reports which help us to drill down on any differences.


And let me say that the launching of the banking union without too much emphasis has been the most important act of integration since the launching of the euro itself. The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough. Good morning everyone and welcome to Cintra for the sixth ECB forum on central banking. This year we are celebrating the 20th anniversary of the Economic and Monetary Union in Europe. And today, as for the programme, we will look back mostly and discuss the experiences gained over two decades. Tomorrow we will look to the future and consider the factors that will affect growth and prosperity in euro area countries. Each session, as always, each session and panel will conclude with a Q&A session. And as in previous years, I can expect that we'll have a very stimulating, rich and engaging discussion. And given the time that we have today, we will have time for Q&A and also be back on time. Before I give the floor to President Draghi for his introductory speech, I would like to remind everyone and clarify our media policy. All sessions and panels during the forum will be webcast live. They are on the record and they are reported upon live. All conversations with forum participants taking place on the sides of the forum are strictly off the record. Also this year we have a graphic recorder at the side in the room who will be taking visual notes of the proceedings and the conference. And finally, for those of you who are interested and want to join the social media conversation, we invite you to follow us on Twitter using the hashtag, hashtag ECB forum. And let me now give the floor to President Draghi for his introductory remarks. Thank you. Good morning. Central banks were often established in the past with the aim of bringing stability in the aftermath of historic episodes. The Bank of England was established, Mark, during the sovereign debt crisis of 1690 when the government was unable to obtain funding in the market. The Federal Reserve was created after a series of panics that had rocked the US banking system in the late 19th and early 20th century. The euro was introduced 20 years ago in response to repeated episodes of exchange rate instability and the need to secure the single market against competitive devaluations. The ECB was established as the keystone of the new economic and monetary union. The first decade of the monetary union was characterized by calm macroeconomic conditions with limited volatility and steady economic growth. The second decade, however, has seen profound shifts in the prevailing environment, including both financial and sovereign debt crisis. And our monetary policy strategy has had to adapt to that. I would like to discuss this morning why this evolution came about and how it was achieved. And what the past 20 years can tell us about the ECB's monetary policy in the future. The ECB's mandate is given by the treaty as price stability. In 1998, the governing council defined price stability as inflation within a range of 0% to 2% over the medium term, which constitutes the ECB's objective. Then in 2003, the governing council clarified that within this range it would aim at a focal point of below but close to 2%, which remains our medium term aim to this day. This was a formulation that differed from the standard inflation targeting framework of the time, which was typically based around a point target for inflation. But there were sound reasons why this definition was put in place. In common with central banks across the world, the ECB faced a macroeconomic environment before the crisis that was predominantly defined by low volatility and moderate shocks, with the distribution of shocks to inflation almost exclusively to the upside. In the Euro area, HICP energy prices rose by 80% between January 1999 and September 2008. Under these conditions, establishing a strong reaction function against high inflation was seen as crucial to anchor inflation expectations. Emphasizing an aim of below but close to 2% was seen to imply a stronger commitment than a standard inflation targeting regime. But monetary policy in the Euro area also faced a special challenge. The ECB was a new central bank operating in a very heterogeneous monetary union, which created a particular imperative to establish inflation credibility. Establishing a commitment to controlling inflation was seen as critical to cement lower inflation expectations across the Euro area, especially as moderate inflation was a relatively new phenomenon in several member states. Over the 20 years up to 1999, inflation had averaged above 3% in 10 of the 12 original members. The decline in inflation in many countries in the run-up to the Economic and Monetary Union was in large part due to expectations of joining, as well as to a number of extraordinary actions taken by the national authorities to meet the convergence criteria. From 1989 to 1999, long-term inflation expectations had fallen from a range between 2.5 to 4.5% in the four largest Euro area economies to below 2% across the board. It was now the task of the new central bank to lock in this moderate inflation environment, and it did so successfully. Over the next decade, inflation expectations internalized the ECB's commitment to keep inflation down and remained below 2%. But this process of building inflation credibility had implications for the ECB's reaction function. As a matter of accounting, stabilizing headline inflation largely caused by its volatile components must mean that core inflation adjusts downwards. Rolling cross-correlations between energy inflation and core inflation show that an episode of high-energy inflation between 1999 and 2007 was accompanied by a period of rapidly softening core inflation. As a result, between January 1999 and September 2008, headline inflation in the Euro area averaged 2.35%, while core inflation averaged 1.7% and exceeded 2% less than 15% of the time. Central banks in other advanced economies faced similar challenges and adopted similar strategies, but differences in mandates and length of track records in fighting inflation led to differences in how much energy price passed through to headline inflation others were comfortable accommodating. For example, energy prices in US CPI rose by 160% over the same period and headline inflation averaged 2.9%. The Federal Reserve reacted less to headline inflation and core CPI inflation averaged 2.2%. The upshot was that the Euro area entered the crisis, having succeeded in establishing its anti-inflation credentials, but with underlying inflation dynamics that were perhaps relatively weaker. This was not immediately apparent, as inflation stayed at fairly elevated levels for more than four years after the Lehman crash. Monetary policy responded decisively to the global financial crisis and disinflationary threats seemed to pass quickly. But in hindsight, it seems reasonable to conclude that the inflation process was vulnerable to a shift in the environment, which is what transpired from around mid-2012 onwards. At this point, headline inflation in the Euro area began what was in retrospect a prolonged downward drift and core inflation fell by almost a percentage point from mid-2012 to early-2014. There are two factors that help explain the switch to a disinflationary trend. First, the distribution of shocks to inflation moved strongly to the downside, and the amplitude of the shocks increased. Supply-side shocks gradually dissipated over the years following the Lehman crash and the sovereign debt crisis. Negative demand shocks, driven at different times by domestic demand and external demand, instead became the dominant source of macroeconomic fluctuations in the Euro area. ECB analysis shows that negative demand shocks have waited on Euro area inflation by more than one percentage point on average since the start of the crisis. In the previous ten years, their effect was neutral overall, with periods of both upward and downward pressure. The second factor was a change in the macroeconomic policy mix. While in the first phase of the crisis, fiscal and monetary policy had eased in tandem with fiscal policy loosening by a total of about three percent of potential GDP between 2008 and 2010, thereafter, the stance of monetary and fiscal policy decoupled. The Euro area fiscal stance turned contractionary in response to the sovereign debt crisis, tightening by around four percentage points of potential GDP until 2013, as the Euro area was mostly in recession. This stands in contrast to the United States, where fiscal policy eased more in the initial phase of the crisis by about 6.5 percent of potential GDP in total over 2008 and 2009, and then tightened by about 5.5 percent of potential GDP from 2011 to 2013 when the economic recovery was underway. The Euro area was forced onto a differential path by the need in some countries to re-establish fiscal credibility. But on aggregate, the Euro area didn't have less fiscal space than the United States. Public debt levels were similar in the two jurisdictions. The key difference was that fiscal stabilization in the United States took place at the federal level, while the Euro area lacked a central fiscal instrument to act counter-cyclically. The policy mix is also relevant when it comes to the financial sector policies. After the crisis, it was inevitable that banking sectors in advanced economies would have to be leveraged, both to cover losses and refocus their business models. The United States ensured that this process happened quickly and early. Around 500 failing banks were resolved by the Federal Deposit Insurance Corporation, while struggling banks were stress-tested and re-capitalized through the Troubled Asset Relief Program. Between 2008 and 2011, US banks improved their leveraged ratio by 1.6 percentage points from 7.2 to 8.8. The response in the Euro area was more sluggish. Despite being more leveraged than their US peers before the crisis, Euro area banks improved their leveraged ratio by just 0.9 percentage points from 3.7 to 4.6. And this was achieved more through shedding assets and less through raising capital. This in part reflected the fact that due to the fiscal rules, public support for banks was concentrated in countries with fiscal space. Moreover, without a common resolution framework, only around 50 banks were resolved in the Euro area in this period. So, a weak banking sector continued to drag on the Euro area economy, which was especially pernicious given the importance of the bank lending channel for financing. In sum, the ECB faced an environment where there was both an increasing need to counter demand shocks and an increasing burden on monetary policy to do so. Our strategy therefore had to adapt through these new circumstances in order to continue delivering our aim. Monetary policy responded first in the summer of 2012 by acting to diffuse the sovereign debt crisis, which had evolved from a tail risk for inflation into a material threat to price stability. Announcing outright monetary transactions established our commitment to counter unwarranted written omination risks in sovereign debt markets and acted as a powerful circuit breaker. While OMT was never activated, the effect of its announcement was equivalent to that of a large-scale asset purchase program. Spreads in vulnerable countries fell on an average of more than 400 basis points over the next two years. The macroeconomic impact of OMT was also analogous to other purchase programs. ECB research finds that GDP and price effects of OMT were broadly in line with those estimated for the QE that took place in the United States and the United Kingdom. But the lingering effects of the sovereign debt crisis dented the capacity of this stimulus to counter the new disinflationary trend. The delayed bank-delveraging process in the Euro area began to accelerate, with banks further shrinking their balance sheets and paying back central bank loans. Bank balance sheets declined by around 20 percentage points of GDP in 2013 alone, and at the end of 2013 credit growth to the private sector was contracting at the rate of 2.4% relative to a year earlier. On the demand side, risk appetite in the private sector collapsed, with investments subtracting 1.6 percentage points from GDP growth in 2012. The ECB therefore reacted again in 2013 by cutting its main refinancing rate twice from 0.75 to 0.25 and by seizing the opportunity of the launch of a European banking supervision. We carried out a comprehensive assessment of bank balance sheets with the aim of steering the process of balance sheet repair towards a positive macroeconomic outcome. Banks strengthened their balance sheets by over 200 billion euro in advance of the outcome. That put the banking sector in a much stronger position to transmit our policy. But at this point, the euro economy was hit by a further downward shock to inflation in the form of a 60% collapse in oil prices in mid-2014, which pushed inflation into negative territory. With underlying inflation already weakening, inflation expectations began to be affected. As the scope for further interest rate cuts was now limited, it became increasingly clear that our reaction function needed to evolve to address these new challenges. Indeed, since our policy framework has never been systematically tested by persistent disinflationary risk, the ECB had not yet had a chance to demonstrate its intolerance for inflation remaining below its aim for protracted periods of time. At the same time, there appeared to be some uncertainty about which tools we would be able to deploy if the effective lower bound were reached. Unlike in other major economies, the ECB had not resorted to large-scale asset purchases during the global financial crisis and its aftermath. Some even questioned the legality of asset purchases in Europe and their effectiveness in our bank-based economy. If these uncertainties were not removed, there was a material risk that falling inflation could become self-fulfilling. The public could begin expecting a smaller monetary policy response to future inflation undershoots and revise their inflation expectations further downwards. In other words, credibility now relied not just on perceptions of the ECB's commitment to our aim, but also on perceptions of our capability to fight low inflation. We responded to this situation in three main ways. The first was by clarifying the symmetry of our aim. While the quantitative definition of price stability was instrumental in establishing credibility in the first decade, its asymmetric formulation may have led to misperceptions in a low inflation environment. Thus, we made clear that our policy aim was fully symmetric, and it was symmetric around the level that we had established in 2003, below but close to 2%. It is achieving this aim over the medium term that steers our policy decisions. In addition, we clarified that symmetry meant not only that we would not accept persistently low inflation, but also that there was no cap on inflation at 2%. As I emphasized on a number of occasions, our medium term orientation implies that inflation can deviate from our aim in both directions, so long as the path of inflation converges back towards that focal point over the medium term policy horizon. The second part of our response was to lay out the tools we would use to counteract down inside inflation risk, which began with a speech I gave in Amsterdam in April 2014 that described three contingencies and the instruments we would use to react to them. This established unambiguously that we had no taboos about resorting to unconventional measures. There was nothing institutionally or legally special about the Euro area that prohibited monetary policy from adding accommodation once the lower bound was approached. Third, as these various contingencies played out, we operationalized our reaction function by launching a series of new instruments. We broke through the zero bound by lowering our deposit rate to negative territory. We launched our targeted long-term refinancing operations to provide incentives for banks to lend and implemented a large-scale asset purchase program of public and private securities. These measures were deliberately designed to work as a package and ease the stance through complementary channels, working both through banks and the wider matrix of capital markets. The negative rate policy challenged market expectations that when rates reached zero, they could only go up and not down, which helped skew the distribution of rate expectations and depress the short end of the risk-free curve. A key benchmark for the pricing of bank loans, asset purchases in tandem compressed yields at the longer end of the curve, pushing down mortgage rates and at the same time making bank lending to firms more attractive in risk-adjusted terms. And bank-based transmission was amplified by the teltrose, which lowered funding costs and increased competition among banks. Over time, we also enhanced this framework with state and date-based forward guidance, allowing us to rotate the marginal tool for determining the policy stance from asset purchases to forward guidance as the economic outlook improved. Today, this forward guidance links our expectations on the path of future rates to the path of inflation towards our aim, leading to automatic easing if the convergence path towards 2% is delayed. There is a mountain evidence that these instruments have been effective. Negative rates have proven to be a very important tool in the Euro area and more so than they would have been in an economy like the United States. Indeed, the Federal Reserve didn't have negative rates in part due to concerns about their effects on the money market industry, which are key intermediaries in the U.S. financial system. But this factor is less relevant in Euro area since many market funds have been operating as variable net asset value funds and therefore are more flexible to extend duration to seek additional returns. Furthermore, the Euro area is a relatively open economy for its size, with total trade making up 51% of GDP, compared with 27% in the United States. This means that the impact on negative rates on inflation and financing conditions via the exchange rate is more powerful. In short, faced with the new environment of downside risks and limited conventional policy space, the ECB showed that it had no shortage of tools available to respond. Unconventional measures proved suitable substitutes for conventional ones. Using market prices to construct a so-called shadow short rate, the stimulus provided appears broadly in line with the recommendations of monitoring policy rules, as suggested by recent academic research. Our capacity to react in this way was made possible by the flexibility embedded in our mandate, a flexibility that was confirmed by the recent ruling of the European Court of Justice. This not only affirmed that asset purchases are a legal instrument of monetary policy in the Euro area, but emphasized the broad discretion of the ECB in using all our tools in a necessary and proportionate way to achieve our objective. However, although we've seen the successful transmission of monetary policy to financing conditions and from financing conditions to GDP and employment, the final legs of the transmission process to wages and inflation have been slower than we expected. But wage growth is now strengthening as slack in the labor market diminishes, but the pass-through from wages to prices remains weak. This may reflect structural changes such as globalization and digitalization, which mostly have an impact at this point in the pricing chain. Linger in cyclical weakness can also delay wage price pass-through, as firms elect to squeeze margins rather than raise prices and risk losing market share. In this environment, what matters is that monetary policy remains committed to its objective and doesn't resign itself to too low inflation. And as I emphasized at our last monetary policy meeting, we are committed and are not resigned to having a low rate of inflation forever or even for now. We have described the overall orientation of our monetary policy as being patient, persistent and prudent. Patient because faced with repeated negative shocks, we've had to extend the policy horizon. Persistent because monetary policy will remain sufficiently accommodative to ensure the sustained convergence of inflation to our aim. Imprudent because we will pay close attention to underlying inflation dynamics and to risk and will adjust policy appropriately. This orientation is expressed in our current policy framework, which allows us to adapt our forward guidance and react flexibly as the macroeconomic situation evolves. And that was illustrated by the monetary policy decisions taken at our meeting earlier in June. Looking forward, the risk outlook remains tilted to the downside and indicators for the coming quarters point to lingering softness. The risks that have been prominent throughout the past year, in particular geopolitical factors, the rising threat of protectionism, vulnerabilities in emerging markets have not dissipated. And the prolongation of risk has weighed on exports and in particular on manufacturing. In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required. In our recent deliberations, the members of the governing council expressed their conviction in pursuing our aim of inflation close to 2% in a symmetric fashion. Just as our policy framework has evolved in the past to counter new challenges, so it can again, in the coming weeks, the governing council will deliberate how our instruments can be adapted, commensurate to the severity of the risk to price stability. We remain able to enhance our forward guidance by adjusting its bias and its conditionality to account for variations in the adjustment path of inflation. And by the way, this applies to all instruments of our monetary policy stance. Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools. And the APP still has considerable headroom. Moreover, the treaty requires that our actions are both necessary and proportionate to fulfill our mandate and achieve our objective, which implies that the limits we establish on our tools are specific to the contingencies we face. If the crisis has shown anything, it is that we will use all the flexibility within our mandate to fulfill our mandate. And we will do so again to answer any challenges to price stability in the future. All these options were raised and discussed at our last meeting. What matters for our policy calibration is our medium-term policy aim, an inflation rate below but close to 2%. That aim is symmetric, which means that if we are to deliver that value of inflation in the medium-term, inflation has to be above that level at some time in the future. But fiscal policy should play its role. Over the last 10 years, the burden of macroeconomic adjustment has fallen disproportionately on monetary policy. We have even seen instances where fiscal policy has been pro-cyclical and countered the monetary stimulus. If the unbalanced macroeconomic policy mix in your area in part explains the slide into disinflation, so a better policy mix can help bring it to a close. Monetary policy can always achieve its objective alone. But especially in Europe, where public sectors are large, it can do so faster and with fewer side effects if fiscal policies are aligned with it. Recreating fiscal space by raising potential output through reforms and public investment and respecting the European fiscal framework will maintain investor confidence in countries with high public debt, low growth and low fiscal space. But as fiscal expansion in the other countries may have limited spillovers, national fiscal policies remain constrained. So work on a common fiscal stabilization instrument of adequate size and design should proceed with broader scope, but especially renewed determination. Let me conclude. The euro was introduced 20 years ago in order to insulate the single market from exchange rate crisis and competitive devaluations that would threaten the sustainability of open markets. But it was also a political project that relying on the success of the single market would lead to the greater integration of its member states. On both counts, the vision of our forefathers has scored relatively well. Imagine where the single market would be today after the global financial crisis and rising protectionism had all countries in Europe being free to adjust their exchange rates. Instead, our economies integrated, converged and coped with the most severe challenge since the Great Depression. And that leads me to four observations. First, the integration of our economies and within the convergence of our member states has also greatly increased. Misalignments of real effective exchange rates between euro-era countries are about a half those between advanced economies with flexible exchange rates or countries linked by pegged exchange rates. Not only that, these misalignments have also fallen by around 20% in the second decade of the emu relative to the first. Second, about convergence. The dispersion of growth rates across euro-era countries having fallen considerably since 1999 is since 2014 comparable to the dispersion across U.S. states. Third, about prosperity growth. No, again about integration. This process has been driven in large part by the deepening of European value chains with emu countries now significantly more integrated with each other than the United States or China are with the rest of the world. Most emu countries export more with each other than with U.S., China or Russia. Fourth, employment in the euro area has reached record highs in all euro-era countries but one stands above its 1999 level. But having said that, the remaining institutional weaknesses or monetary union cannot be ignored at the cost of seriously damaging what's been achieved. Logic would suggest that the more integrated our economies become, the faster should be the completion of the banking union and the capital markets union and the faster the transition from a rules-based system for fiscal policies to an institution-based fiscal capacity. The journey towards greater integration that our citizens and firms started 20 years ago has been long, far from finished and with broad but uneven success. But overall, it has strengthened the conviction of our peoples that it is only through more Europe that the implications of this integration can be managed. For some, that trust may lie in a genuine faith in our common destiny. For others, it may come from the appreciation of the greater prosperity so far achieved. For yet others, that trust may be forced by the increased and unavoidable closeness of our countries. Be that as it may, that trust is now the bedrock upon which our leaders can and will build the next steps of our economic and monetary union. Thanks.


Hi and welcome to the session. I am Asha and I am going to help you with the following question which says, a GP consists of an even number of terms. If the sum of all the terms is 5 times the sum of terms occupying odd places, then find its common ratio. Let us now begin with the solution and let the GP be a, a r, a r square, a r cube. Now, the sum of these terms is equal to a into r raised to the power 2n minus 1 upon r minus 1. So, let this be equation number 1 and now let us find the sum of terms occupying odd spaces. So, the terms occupying odd spaces are a r square, a r raised to the power 4 and so on in terms. So, the sum of these n terms is equal to a. Now, the common difference is r square and the terms are n minus 1 upon r square minus 1 or we can say that as n is equal to a r raised to the power 2n minus 1 upon r square minus 1. So, let this be equation number 2. Given that the sum of all the terms is 5 times the sum of terms occupying odd places. So, its 2n is equal to 5 times of sn or a r raised to the power 2n minus 1 upon r minus 1 is equal to a into r raised to the power 2n minus 1 upon r square minus 1 into 5. Or we can say that a cancels out with a r raised to the power 2n minus 1 with r raised to the power 2n minus 1 and we have 1 upon r minus 1 in the left hand side. And on the right hand side we have 1 upon r minus 1 into r plus 1 into 5 or we can say that 1 is equal to 5 upon r plus 1 or r plus 1 is equal to 5 or r is equal to 4. Therefore, the common ratio is 4. So, this completes the solution. Take care and have a good day.


I have this bread maker. As it is far too big to appear on the workbench, let me just disassemble it so I can show you the interesting bits. Here we have the oven. It is a heated bucket with a heating element which you can see here, which for some reason has no insulation on the outside for maximum inefficiency. Here there is a linear induction motor, mains powered. This turns a pulley system underneath that in turn turns this. This slots into the bottom of the actual heating can thing that goes in here and turns a paddle. Over here we have the electronics that runs it. There are two boards. There's this yellow one and underneath there's the green one. The yellow one is the high voltage board. This has got the mains power supply for the low voltage board, a relay for operating the heating element, and a thyristor, I believe. This controls the motor. The motor only runs at a single speed because it's a synchronous mains motor. So in order to turn the paddle slowly it gets pulsed on and off at brief intervals. The low voltage logic board underneath, which I haven't taken apart yet, contains the control panel and the microcontroller that does all the sequencing, LCD and buttons. In terms of sensing, it doesn't have a lot. There is a single temperature sensor, which is this thing here, that plugs into this sensor connection here, and there's these, which are a fusible link which is used for emergency power off if the bucket gets too hot, marked fuse, which is this connector here. And that's all there is to it. The whole thing operates by basically brute force. The microcontroller knows nothing about what's going on in the bucket other than the temperature, time, and nothing else. So the context is that I have just upgraded to a bigger and better bread maker. So this one is now surplus to requirements, which means what is there ridiculously poorly advised that I can do with this thing? I've removed the boards from the machine for a closer inspection. The low voltage board contains very little of actual interest. There's a ubiquitous microcontroller here, which if for some reason isn't blobbed, so I can actually read the number on it, but I've tried looking it up and I've got nowhere. It's probably a 8-bit microcontroller with a handful of bytes of memory. We've got the LCD, some buttons, and this tiny chip here, which I can't read the number of, but has probably got to do with, I was about to say running the LCD, but I now notice it's connected around here to the buttons, so it might be a port multiplier for those. The high voltage board contains a bit more of interest. We've got the relay, we've got whatever that is. We've got a couple of hopefully class Y capacitors used for the switch mode supply, switch mode supply controller. This used to be a buzzer, but when I first got the machine I removed it because the buzzer was incredibly annoying. If we turn it over, try and avoid glare, we can actually see all these slots. These are isolation slots separating the low voltage side of things, which is over here, from the high voltage side of things, which is up here. Main's comes in here, is regulated, it gets turned into probably about 5 volts, and is used to drive the rest of the system. So for example, if we look at this relay, which I believe is used to control the heater, we can see that it is nicely isolated from the low voltage side by these slots, except for this pin here, because this will be the mains coming in or out, the other side of it will be here, and while these two pins will be the low voltage used to actually turn the relay on and off, so if you follow these tracks, the extra solder here is because this is a high power track, increases the current. That connects to this pin, which, what do we know it, is part of the connector marked heat, so that will be power out to the heater. This will be probably live, that connects up to this fuse, which will be connected across to here, which is, yes, it's the live pin of the mains input. So the power transistor thing, this thing, is these three pins, you can see there is another slot, indicating that this side is low voltage and this side is high voltage. So, yeah, that's used to control the motor. Here are the three pins controlling the motor. One of them goes to the power thing, whatever it is, while these two connect to, well, this one is clearly the low voltage, this one is connected through here to the high voltage side, so that's probably neutral slash ground. Okay, that is interesting, because the fact that there is a connection all the way through from the high voltage side to the low voltage side indicates that this probably isn't an isolated supply. What this means is, if I were to plug this in, there's a decent chance that all the low voltage side of things will actually be floating at mains voltage, which would be bad if I were to poke it with, you know, a finger. This would have been safe enough because all this was inside a big plastic box. That is actually kind of disappointing. What I was hoping to do was to figure out the pinout here, unplug the low voltage board, like so, plug in my own microcontroller, and that would give me direct access to the sensor, the heater control, and the motor control, so I can now drive all the useful bits of the bread maker using this board, and this board would also provide me a power supply. But if this is not an isolated supply, I am rather less keen on doing that. Let's abandon the PCBs for a bit and take a look at the bucket and motor. This is a stock single phase induction motor. Three wires, presumably positive, negative, and ground. I am not particularly up to speed with these things and don't really want to have to deal with it. They are a paint drive, and you need one of these monster capacitors in order to actually start them. The motor is connected to this belt system for gearing it down, so the motor doesn't have to push the enormously stiff paddle through the dough itself. It can spin at a much higher speed, and the pulley gears it down to provide more torque. I successfully removed the circuit clip without it pinging across the room. So the pulley here should therefore just pull off and manage to loosen it so this bit just comes off, and the rest of the pulley is fastened onto the post in some other exotic fashion. Anyway, here is the induction motor. This is a fan to keep it cool. It's quite heavy. As I say, I don't really have anything to do with these things, so it says 80 watts, which is a fairly powerful motor. So if I want to do anything with this machine, I'm going to have to find another motor of equivalent power in order to be able to successfully knead dough. In the interest of science, I have reassembled it all up to a point. I'm going to plug this in and turn it on because I need to know how fast this motor is and what the step down gear is. So what I'm going to do is capture some footage of it at 60 frames a second and then go through it and count frames to see how long it will take these markers to go around. And that should, I hope, let me figure out how fast the motor is. Probably about a thousand RPM, so that's not supposed to happen. Now, as I said before, this thing has a floating power supply, which means that when it's turned on, all the low voltage stuff under here will be live. This is earthed. I made sure to reattach the earth cable, so this should be fine. All right, here we are. It's turned on. It's currently set to basic. So if I press the button, it's faster than I was thinking. Okay, I just had it run on one of the programs and it stopped pulsing and it is now running at full speed. And I just hope I'm getting some actual data out of this. I did, in fact, get some data. If I go through the video frame by frame, I can see that the yellow mark on the large wheel, which is only just visible due to motion blur, takes about 11 frames to go around. So let's do some maths. We're recording this at 30 frames per second, which means each frame is about 0.03 of a second. Therefore, 11 frames gives us a total rotational period of about 0.4 seconds. From this, we can calculate the speed in RPM and revolutions per second of the big wheel. But we're not actually interested in the big wheel. We're interested in the motor itself. So by measuring the sizes of the large and small wheels, this allows us to figure out the gear ratio of the pulley system. From there, a simple multiplication will let us figure out the rotational speed of the motor. That is, the motor has to turn this fast to get the large wheel rotating the speed we measured. Luckily, the motor has its power rating written on the label on the side, which is 80 watts. So by using a calculation which I looked up online and don't actually understand, we can calculate that the motor's maximum torque is 0.61 Newton meters. This is useful because now I can look up online and by myself, a much easier to control DC motor that produces about the same amount of torque. Some toys from China have just arrived. So what we've got here is two electric motors plus the controller boards. The reason why I have two of each is I've additionally ordered a brushed electric motor, note two wires, and a brushless motor controller, note lots of connections, and received a nice email from the people from AliExpress. I ordered it from saying that this wouldn't work. So I then ended up ordering a brushed motor controller and brushless motor, note lots of wires. Now I have both sets like that. So let's fire them up and see if they work. Here it is all wired up.  So I have my bench power supply set to 19 volts. So let's turn it on. Okay, we've got a green light. Press the switch. That's going round. Well, that seems to work. It's a little bit gritty. This motor has a built-in gearbox to step it down. It says 800 rpm. The other motor is noticeably smaller, so either brushless motors are more powerful for the size, which might be true, or else they sent me a underspect motor. Well, the brushed motor and power supply all seem to work fine. It'll run in both directions, which is nice. Although the gearbox is noticeably more gritty running in reverse. I like the fact it's got a switch on it. I like the fact that the knob is on an extension lead. So this should work fine. Let's see if I can make the other one work. Okay, this one was significantly harder to wire up due to there being more wires. This one is disconnected. This one seems to be a sensor line which lets the motor control know how fast the motor is turning, which this controller doesn't do. But we have positive, negative pulse width modulation line for changing the speed, and a line marked positive negative that seems to control the direction. Anyway, assuming it's wired up correctly, let's power it on. That's nice. That's changing the direction of rotation. Good lot of torque there, I have to say. What does this one do? Ah, high low speed. No, maximum speed. That switches it from pulse width modulation mode to flat out. So in terms of motors, I think I'm going to go with the brushed motor as I think this is higher specced. And I suspect I'm going to need all the torque I can get. The brushless motor is interesting and I'm going to keep that for another project. But I think that this one will be both more suited for what I want it for. And given its larger footprint, it should also be easier to mount into the machine. Well, I have it bodged into place. The original belt cog designed for the induction motor wants a much bigger shaft than this thing's got, so I had to 3D print one. This is kind of a prototype, given that this stuff softens at about 180 and that I'm going to be running the oven, here at maybe 200. That's not really a long term solution, but it is enough to demonstrate that the thing works. Let me just up the power. Ouch, the noise. Okay, I think a lot of that's coming from the gearbox, but still that's just too loud. I suppose that is one advantage of these things. No gearbox, no contacts or anything. I think that I am going to give the other motor, wherever it's got to, here it is, a try. This might be lower power, but it's a brushless motor and I suppose there's a potential that it'll be quieter. We will see. After a fair bit of effort on my third try, I successfully made a mount for this motor out of the top of a tin can. I only cut myself once on it too. Not a very big cut. Anyway, it works. Let me try and get this thing on camera and focused. Here is the motor controller. So that is as fast as it goes. That's not very fast. I am very much not convinced that this motor is 85 watts. I am very convinced that it is not 85 watts. It does seem to be providing a whole lot of torque. I can't actually stop this wheel moving and if I try, eventually the belt slips. Like so. Here we have 75 grams of flour, some salt and some oil, and I've got some water to put in it. Let's see if the paddle is actually capable of stirring this. Let's turn the power on. It's quite slow. So this is working fine. It's producing a reasonably elastic dough. It's not having any trouble with the load, but I don't think there's enough in here to warrant a decent test. So I'm going to fill this up with some more stuff and go again. I think that is actually working. I'm still not terribly pleased and I particularly don't like this little controller. It starts up in the wrong direction. That might be configurable with the jumper. It doesn't actually say what the settings are, but it will do for now. So I think I'm just going to leave it as is. I can always switch over to the other motor if necessary and move on. But first I need to put this into a dish for rising overnight. This is the other considerably hairier part of the project. This is an off-the-shelf oven controller. This is a solid-state relay. The oven controller uses this turn-heating element on and off, if I can get the thing out. It's basically a silicon relay. This is a K-type thermocouple, which is used to set the temperature. And this is the mighty heat sink required by the solid-state relay. This is all going to be responsible for maintaining the temperature in the oven. And this all runs off mains voltage. Which means I'm not very happy with it. But anyway, wiring it up should be fairly straightforward. Having looked at the manual, we connect the mains up to terminals one and two, which are nice and clearly labeled. We wire the thermocouple up to pins 10 and 11 of these two. The solid-state relay sent input, which is a 332 volt DC signal, gets wired up to pins 4 and 5. And 6 and 7 is labeled Alarm 1, and I have me able to figure out what these do. Here it is all wired up. Hopefully correctly. OK, mains input comes in here to this chocolate block. This then feeds the power supply to the timer itself. We also have a mains live output that goes to the input of the solid-state relay. The output of the solid-state relay goes through the chocolate block through this old-fashioned incandescent light bulb that is standing in for the heater and comes back out as the neutral and goes to the mains. The temperature sensor is wired up here to pins 9 and 10. So that should be all it needs. So let me try and make this thing stand up so I can see the controls. Hopefully the right way up. And then we're going to plug it in and see what happens. OK, time to turn on the power. Right. So it all seems to be working. The light's on, so it thinks that the temperature is too low and it's trying to run the heating element. The red number is the temperature it's currently detecting. The green number is the temperature that it's set to. Alarm 2 seems to indicate that it is under temperature. We have a red light here in the solid-state relay indicating that it's turned on, which is why the bulb is turned on. Now it's working, so let's turn the temperature down to 0 and it turns the element off because it's too cold. Let's just wind this up to 28. It is pulsed with modulating the heating element. Let me just put that up a bit further because this is not a heating element. This is a light bulb. Yup, that's good. It's not running the heating element for power. It is pulsing it briefly to try and get a little bit more heat in. Very nice. It's up to 99. And now it's running the heating element for power. Excellent. This all works. I'm kind of amazed, like, out of the box. I didn't have to configure it or anything. Now I have to figure out how to build it into the bread maker and hook this up to the actual heating element. By the way, this lamp is extremely shoddy. That's because I made it when I was 10. That was a long time ago. Well, here it is, all hooked up and ready to go in its janky, hot glued together glory. I have made a few changes to the design. The most noticeable being this. This is an IKEA cutlery tray that I happen to have in the back of a cupboard. The reason for this is that I was getting increasingly uncomfortable with the amount of electronics it would have to fit in the very small space in here. You can see here's a couple of holes. They were drilled to mount one of the PCBs. There was just enough space, but everything would have been really close to the hot oven compartment, which I didn't really like. Also, laying it out like this means I can separate all the low voltage side, which is this, from the high voltage side, which is this. I was planning to integrate a power supply and run everything off a single mains cable, but after this power supply gave me a shock when I was working on it, iRobot power supplies don't seem to have discharge resistors across the big capacitor. Who knew? I decided that it wasn't a good idea and also there's not really enough space, so I'm just using an external power supply that plugs in the back here. On the front, you turn this the right way up again to make sure it's all reasonably centered. We have the motor control switch, the motor control knob, a gap where the power switch is going to go and the oven controller here. Inside, we just have the compartment as usual.  So let me hook up the DC supply and show you that in operation. Oh yes, another design change. I switched to the brushed motor. It wasn't so much the size and the noise, it was the fact that integrating the controls was vastly easier because they were all on wires. If I'd used the brushless motor, I would have had to desolder bits of the brushless motor controller and I just didn't want to do that. So anyway, if we turn it on, it is indeed really loud. But it's not too bad at the speeds I actually want to run this out. So if I add the paddle and the actual tray, I doubt I'll want it to go much faster than this. It will go all the way up to that, but I don't want to. And of course, it will go in reverse at which point it starts unscrewing the can. But that's not the interesting bit. The bit I actually want to demonstrate is the mains side of things. The oven controller and heating element. It's all wired up, but I haven't actually, you know, tested it yet. So let me just prepare to do that. It is hooked up and ready to go. Everything's on camera and recently sentered. The reason why I'm echoey is I'm in my kitchen. This is because, firstly, this is where cooking stuff happens. And secondly, it's on tiles, which means if it all goes horribly awesome, then I've got a minimum of burnable stuff and my fire equipment close by. Let me just get these out of the way. Okay. It is plugged into both a watt meter and a RCD. It is registering half a watt. That must be the RCD. Anyway, let's hit the button. Nothing's gone badly wrong yet. The heating element should be set to 99 degrees. 24 seems about right. Can I fuel heat? I think I can. So let's just crank down the temperature. The... Come on. So if I put that to zero, it should stop heating completely. And looking at the watt meter, it is at 1.4 watts. Okay. Let's put it up to 103. 460 watts. Yes, that is correctly operating the heating element. The temperature sensor is straight down there. Oh yeah, there's definitely heat coming off there. Which means it is immediately above the heating element. So it is going to over-register. Now, one thing I need to be aware of with this is that it is set up as an oven. The heating element does not touch the cooking can thing, which means its ability to transfer heat into the can is kind of limited. Nothing too exciting seems to be happening. So let's set this for a reasonably sane 75. It moves very rapidly. And see if it stabilizes. So not long afterwards, it has reached its target temperature of 75 and seems to be staying there almost on the dot. It's just ticked down one. Yep, I can see a pulse go through the heating element. I actually think this top light may show when the heating element's on. If I had a neon, I would hook it up just to make it a bit more obvious. So if we open the lid, lots of heat coming out, it should crank up the power. Yeah, I think it is looking at the wattmeter. All right, I believe this is all working. So there is only one thing I really need to do now, which is to try cooking with it. I don't think that is the good kind of smoke.  Of course, now I have a half made single cup cupcake. So I have turned it back on again. There is still smoke, but I think it's coming from stuff on the heating element. It is slowly dying away, even though the camera does seem to show more of it than there really is. So I am tentatively going to let it continue for a bit. As it gets up to temperature, the heating element will be energised less and less. You can see the pulsing here. And it is actually nearly there. Of course, now I realise I forgot to put any flavouring in the cupcake. There is actually another thing this could be. I oiled the pan because the bearing where the paddle goes was quite stiff. Is this just the oil burning off? That does actually seem quite likely. I've done this before. I mean, oiled it before. In order to make bread with this machine. So has it been producing all this smoke in normal operation? And I just... Alright, that is 20 minutes. I'm going to call it done. It's golden brown on the top. Yeah, smoking coming from the... Not from this. So let's have a look. So apart from the panic about the smoke, which honestly was my own fault, I think that may have actually worked. It seems to have cooked this cupcake that has completely failed to actually come loose from the side. It's possibly a bit underdone. It is a little bit doughy, but tastes pretty good actually, despite the lack of flavouring. So if I can stop it smoking, which would just be a matter of using it a few times until the oil burns off, and then replacing it with high temperature lubricant, which I should have done in the first place, then I think that works reasonably well as an oven. But I want to use the paddle as well. So I think the next experiment is going to need to boil something. I want to make French onion soup. French onion soup is an easy but laborious process. It involves caramelising onions, which basically means standing over the pot and stirring for about 45 minutes. So this is what my automation is designed to do. So let's give that a try. First step, heat. 160 degrees seems to be about the right temperature. So we crank this up to 160. And it's heating. Next step is some butter. You may need more than that. Then the onions. The recipe actually called for half a kilo of onions, which turned out to be way too many to fit in the bucket. So now all we need to do is to stir. So let's try not too fast. A little bit more than that. So now we just close the lid and wait. The temperature sensor is just past 100. But there's a lot of heat coming off it, but the butter hasn't melted yet. So I imagine the temperature in the bucket is rather lower than that. The temperature has hit 150, and it is definitely cooking. So I think I'm going to lower the thermostat to something a bit closer to where it currently is. And see if that will do. I don't want to get it too hot, you see. The paddle is continuing to go round, which is nice. Ten minutes later or so, it has really cooked down. It's well on the way to caramelizing. You can see some of the ones have got stuck on the edge. They've gone dark brown. I believe that's working. Look at the way the temperature dropped off when I opened the lid. It's actually cooked down so much. I'm wondering whether I should put the other 250 grams of onion in. I'm only going to be making about a liter of soup. So I will leave it like this, I think. So at 150, it wasn't quite hot enough to caramelize the onion. So I put it up to 160 and look what's happened. There's some rather brown bits than I was expecting, but it is looking pretty nice. So I think it's time for the next stage, which is to add the liquid. So that is wine, water and a stock cube. Now I expect the temperature to drop off very rapidly, as that is cold water. So the water is going to soak up all the heat and you can actually see it slowly dropping. I think I'm going to reduce the temperature to 110. We want it to simmer and not go into a rolling boil. So let's leave it like that and see what happens. So it's been 110 for a while and the temperature of the water is only about 66. So it is heating up but slowly. So let's just crank the temperature a bit. Also it occurs to me that I forgot a very important step, which is of course to add garlic. It is simmering and smells strongly of cooking red wine. I crank the temperature down to 110 and it continues to simmer and it's actually thickened up. I think this is done now. And here is my soup which I have to say it does smell rather nice and it tastes amazing. So I am rather pleased with that. I am surprised that the polycog didn't melt but it was still stirring all the way to the end. I will check it over again afterwards. But I think that can definitely be called a success. I can actually use this, not just to make like soup the really really hard way but for other things as well. I want to use it to make jam with because this involves heating fruit and sugar together for a long period of time, stirring slowly. I don't think it's going to work very well for anything that involves boiling water off because I would have to keep the lid open for that and I'm not sure that the 500 watt heating element is capable of keeping the can hot enough without wasting most of the heat to the outside. And I also need to investigate installing insulation into the machine. However there are convection slots which may be used to cool the body of the machine and putting insulation there will block the convection and therefore actually make things worse. We'll see. But that is very nice.  I hope you enjoyed this video. As always please let me know what you think in the comments and now I'm going to eat my soup.