Caden Healey is a realtor. He organized the business as a corporation on December 16, 2017. The business received $60,000 cash from Healey and issued common stock. Consider the following facts as of December 31, 2017: a. Healey has $12,000 in his personal bank account and $48,000 in the business bank account. b. Healey owes $6,800 on a personal charge

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Caden Healey is a realtor. He organized the business as a corporation on December 16, 2017. The business received $60,000 cash from Healey and issued common stock. Consider the following facts as of December 31, 2017:
a. Healey has $12,000 in his personal bank account and $48,000 in the business bank account.
b. Healey owes $6,800 on a personal charge account at a local department store.
c. Healey acquired business furniture for $23,400 on December 24. Of this amount, the business owes $2,000 on accounts payable at December 31.
d. Office supplies on hand at the real estate office total $2,000.
e. Healey's business owes $132,000 on a note payable for some land acquired for a total price of $168,000.
f. Healey's business spent $15,000 for a Realty First franchise, which entitles him to represent himself as an agent. Realty First is a national affiliation of independent real estate agents. This franchise is a business asset.
g. Healey owes $190,000 on a personal mortgage on his personal residence, which he acquired in 2012 for a total price of $405,000.
Requirements
1. Prepare the balance sheet of the real estate business of Caden Healey Realtor, Inc., at December 31, 2017.
2. Does it appear that the realty business can pay its debts? How can you tell?
3. Identify the personal items given in the preceding facts that should not be reported on the balance sheet of the business.
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Related Book For answer-question

Financial Accounting

11th edition

Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz

ISBN: 978-0134127620