Carla Hilton is a realtor. She organized the business as a corporation on December 16, 2013. The business received $55,000 cash from Hilton and issued common stock. Consider the following facts as of December 31, 2013.a. Hilton has $16,000 in her personal bank account and $66,000 in the business bank account.b. Hilton owes $6,000 on a personal charge account with

Carla Hilton is a realtor. She organized the business as a corporation on December 16, 2013. The business received $55,000 cash from Hilton and issued common stock. Consider the following facts as of December 31, 2013.
a. Hilton has $16,000 in her personal bank account and $66,000 in the business bank account.
b. Hilton owes $6,000 on a personal charge account with Clothing Outlet.
c. Hilton acquired business furniture for $45,000 on December 24. Of this amount, the business owes $32,000 on accounts payable at December 31.
d. Office supplies on hand at the real estate office total $7,000.
e. Hilton’s business owes $45,000 on a note payable for some land acquired for a total price of $118,000.
f. Hilton’s business spent $21,000 for a Your Home Realty franchise, which entitles her to represent herself as an agent. Your Home Realty is a national affiliation of independent real estate agents. This franchise is a business asset.
g. Hilton owes $100,000 on a personal mortgage on her personal residence, which she acquired in 2003 for a total price of $400,000.

Requirements
1. Prepare the balance sheet of the real estate business of Carla Hilton Realtor, Inc., at December 31, 2013.
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...

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!
Related Book For answer-question

Financial accounting

9th edition

Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom

ISBN: 978-0132751124