Rayshanti Williamson is opening a tax preparation service on December 1, which will be called Williamson’s Tax Service. Williamson plans to open the business by depositing $50,000 cash into a business checking account. The following assets will also be owned by the business: furniture (fair market value of $15,000) and computers and printers (fair market value of $17,000). There will be no outstanding debts of the business when it is formed.

INSTRUCTIONS
Prepare a balance sheet for December 1, 20X1, for Williamson’s Tax Service by entering the correct balances in the appropriate accounts.

Analyze: 

If Williamson’s Tax Service had an outstanding debt of $16,000 when the business was formed, what amount should be reported on the balance sheet for owner’s equity?