Bachino’s Pizza’s accounts follow. The company has just completed its first year of operations ended September 30, 2014.
Accounts Payable.......... $ 21,000
Accounts Receivable........... 26,400
Cash................ 5,200
Delivery Truck Rent Expense ...... 14,400
Equipment.............. 12,600
Equipment Rental Expense....... 5,800
Marketing Expense.......... 3,000
Owner’s Capital............ 4,000*
Pizza Revenue ............. 164,000
Salaries Expense............ 112,000
Salaries Payable............ 1,400
Supplies................ 800
Supplies Expense............. 8,200
Withdrawals.............. 2,000

Required
1. Prepare Bachino’s Pizza’s income statement, statement of owner’s equity, and balance sheet.
2. Why would Bachino’s Pizza’s owner set his business up as a sole proprietorship and not a partnership? Discuss how profits and obligations are shared in the two forms of business organizations.