Prepare a corpo The first step was for the two owners to form an LLC. The new

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Prepare a corpo The first step was for the two owners to form an LLC. The new company initially authorized 500,000 shares at a $1.00 par value per share.

1) In recognition of their development of the product they issued 200,000 shares, 100,000 to Juan and 100,000 to Ross. The $200,000 cost will be charged to inventory initially and then expensed during their first year of operations.

2) Juan and Ross contacted various family members and sold them 50,000 shares at $1.00.

3) The company then purchased $25,000 of inventory to build the first prototypes.

4) Juan and Ross then loaded their car with their first servers and went on a road trip to sell their product. They traveled to Orange County, Los Angeles, and the Bay Area and sold five servers at $3,000 per server. The cost of the servers was $1,500 and the terms of the sales were net 30 days.

5) The company then purchased additional components to manufacture additional servers totaling $15,000.

6) The company collected the cash owed to it from its initial sale of five servers.

7) Juan and Ross sell an additional four servers at an increased price of $3,500 per server. The cost per server remains $1,500 per server. The terms were net 30 days.

8) One of their initial server customers places a written purchase order for 20 servers at $3,500 per server. The cost per server remains $1,500 per server. The terms were net 30 days.

9) Given their success to date Juan and Ross decide to raise an angel round of investment. The total amount to be raised is $300,000 at $2.00 per share. The angel investment is to be divided between $75,000 for inventory, $75,000 for labor to build servers, $100,000 for sales and marketing, and $50,000 for R&D.

10) The company collected its accounts receivable from the sale of the additional four servers at $3,500 per server.

11) In recognition of their efforts the Board of the company awarded Juan and Ross stock options to purchase 200,000 shares, 100,000 for Juan, and 100,000 for Ross, at $2.00 per share.rate balance sheet for the following transactions: