Andrea Hutchinson is a realtor. She organized her business as a corporation on August 16, 2013. The business received $75,000 cash from Hutchinson and issued common stock. Consider the following facts as of August 31st 2013.
a. Hutchinson has $20,000 in her personal bank account and $74,000 in the business bank account.
b. Hutchinson owes $2,000 on a personal charge account with Banana Store.
c. Hutchinson acquired business furniture for $44,000 on August 24. Of this amount, the business owes $37,000 on accounts payable at August 31.
d. Office supplies on hand at the real estate office total $8,000.
e. Hutchinson's business owes $41,000 on a note payable for some land acquired for a total price of $115,000.
f. Hutchinson's business spent $24,000 for a Realty franchise, which entitles her to represent herself as an agent. Hometown Realty is a national affiliation of independent real estate agents. This franchise isa business asset.
g. Hutchinson owes $90,000 on a personal mortgage on her personal residence, which she acquired in 2003 for a total price of $420,000.
Prepare the balance sheet of the real estate business of Andrea Hutchinson Realtor Inc., at August 31, 2013.
Does it appear that the realty business can pay it's debts? How can you tell?
Identify the personal items given in the proceeding facts that would not be reported on the balance sheet of the business.