Lupita Goodwin is a realtor. She buys and sells properties on her own, and she also earns commission revenue as a real estate agent. She invested $70,000 on March 10, 2014, in the business, Lupita Goodwin Realty. Consider the following facts as of March 31, 2014:
a. Goodwin had $10,000 in her personal bank account and $90,000 in the business bank account.
b. The real estate office had $6,000 of office supplies on hand on March 31, 2014.
c. Lupita Goodwin Realty had spent $25,000 for a Royal LePage franchise, which entitled the company to represent itself as a Royal Lapage member firm. This franchise is a business asset.
d. The company owed $130,000 on a note payable for some undeveloped land that had been acquired by the company for a total price of $165,000.
e. Goodwin owed $185,000 on a personal mortgage on her personal residence, which she acquired in 2001 for a total price of $320,000. f. Goodwin owed $2,000 on a personal charge account with Sears.
g. The company acquired business furniture for $18,000 on March 26. Of this amount, Lupita Goodwin Realty owed $14,000 on account at March 31, 2014.
Required
1. Goodwin is concerned about liability exposure. Which proprietorship feature, if any, limits her personal liability?
2. Prepare the balance sheet of the real estate business of Lupita Goodwin Realty at March 31, 2014.
3. Identify the personal items given in the preceding facts that would not be reported on the balance sheet of the business.