Linda Shriber is a realtor. Shriber organized her business as a corporation on November 14, 2009. The business received $50,000 from Shriber and issued common stock. Consider these facts as of November 30, 2009:
a. Shriber has $10,000 in her personal bank account and $42,000 in the business bank account.
b. Shriber owes $1,800 on a personal charge account with Macy's.
c. The business bought furniture for $17,000 on November 25. Of this amount, the business owes $6,000 on accounts payable at November 30.
d. Office supplies on hand at the real estate office total $1,000.
e. The business owes $40,000 on a note payable for some land acquired for a total price of $120,000.
f. The business spent $20,000 for a Coldwell Banker real estate franchise, which entitles Shriber to represent herself as a Coldwell Banker agent. Coldwell Banker is a national affiliation of independent real estate agents. This franchise is a business asset.
g. Shriber owes $100,000 on a personal mortgage on her personal residence, which she acquired in 2004 for a total price of $160,000.
Required
1. Prepare the balance sheet of the real estate business of Linda Shriber, Realtor, Inc., at
November 30, 2009.
2. Does it appear that Shriber's realty business can pay its debts? How can you tell? (Challenge)
3. Identify the personal items given in the preceding facts that should not be reported on the balance sheet of the business.