The accounting records of LeClaire Delivery Services show the following assets and liabilities as of the end of 2020 and 2019:

During December 2020 the owner, Jess LeClaire, purchased a small office building and moved the business from rented quarters to the new building. The building and the land it occupies cost $112,500. The business paid $60,000 in cash and a note payable was signed for the balance. LeClaire had to invest $17,500 cash in the business to enable it to pay the $60,000. The business earned a profit during 2020, which enabled LeClaire to withdraw $1,500 per month from the business for personal expenses.

Required

1. Prepare balance sheets for the business as of the end of 2019 and the end of 2020.

2. Prepare a calculation to show how much profit was earned by the business during 2020. Analysis Component: Assets increased from $138,750 at December 31, 2019, to $235,200 at December 31, 2020. Using numbers wherever possible, explain how these assets were financed.

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December 31 2020 2019 $ 9,375 Cash. $26,250 Accounts receivable 11,175 14,250 Office supplies. 2,250 1,650 Trucks. Office equipment. 27,000 27,000 73,500 69,000 Land. 22,500 Building. 90,000 3,750 Accounts payable. 18,750 Notes payable. 52,500 .....