(Learning Objectives 2, 4, 5: Preparing a balance sheet; applying the entity assumption; making business decisions) Jeana Hart is a realtor. She organized her business as a corporation on September 16, 20X7. The business received €95,000 from Hart and issued shares to Hart. Consider these facts as of September 30, 20X7.

a. Hart has €15,000 in her personal bank account and €70,000 in the business bank account.

b. Hart owes €2,000 on a personal charge account with the Gap.

c. Hart acquired business furniture for €45,000 on September 25.

Of this amount, the business owes €31,000 on accounts payable at September 30.

d. Offi ce supplies on hand at the real estate offi ce total €7,000.

e. Hart’s business owes €36,000 on a note payable for some land acquired for a total price of €116,000.

f. Hart’s business spent €29,000 for a Realty Region franchise, which entitles her to represent herself as an agent. Realty Region is a national affi liation of independent real estate agents. This franchise is a business asset.

g. Hart owes €140,000 on a personal mortgage on her personal residence, which she acquired in 20X1 for a total price of €360,000.

❙ Requirements 1 Prepare the balance sheet of the real estate business of Jeana Hart Realtor, Inc., at September 30, 20X7.

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.