Problem:
You have decided to start a business selling widgets. You form a corporation, Widgets, Inc. You paid $10 per share for 1,000 shares of stock on January 1, 2016. Next the company borrowed $30,000 from your Aunt Susie. For the $30,000 borrowed from your aunt, the company agrees to pay back that amount on December 31, 2021 and to pay interest at 10% at the end of each year. On January 1, 2016, the company bought 6 widgets for $3,000 each. During the year it sold 4 widgets for $8,000 each. The company also paid a security deposit of $1,000, advertising expense of $2,000, and 12 months of rent, $12,000. Widgets, Inc. bought a delivery van on December 31st that cost $20,000, putting $5,000 down on the van and agreeing to pay the balance next year. On December 31 the company paid the first year's interest to Aunt Susie of $3,000. the tax rate is 30% of income before taxes and the taxes will be paid in 2017.
Prepare T accounts, an income statement, statement of owners' equity and a balance sheet.