Jay Barnett and Ted Johnson formed, BJ Sporting Goods Store, a corporation, on June 1 to operate a sporting goods store. Each acquired 5,000 shares of common stock at par. The par value is $10. During the month of August, the following transactions occurred.
1. Sporting goods inventory of $74,000 was purchased for cash.
2. Total cash sales for the month were $31,000. The inventory that was sold had a cost of $15,500.
3. Jay and Ted received a salary of $3,000. Jay earned sales commissions of $3,200, and Ted earned sales commissions of $700.
4. The corporation borrowed $50,000 from First National Bank.
5. Land and a building were purchased with cash at a cost of $25,000 and $50,000 respectively.
a. Prepare a balance sheet as of August 1.
b. Prepare a balance sheet as of August 31.
c. Reconcile the change in Stockholders' Equity.