Big Screen Scripts is a service-type enterprise in the entertainment field, and its manager, William Pippin, has only a limited knowledge of accounting. Pippin prepared the following balance sheet, which, although arranged satisfactorily, contains certain errors with respect to such concepts as the business entity and asset valuation. Pippin owns all of the corporation's outstanding stock. Assets Cash Notes Receivable Accounts Receivable Land Building Office Furniture Other Assets Total BIG SCREEN SCRIPTS Balance Sheet NOVEMBER 30, CURRENT YEAR 5,150 2,700 2,450 Liabilities & Owner's Equity Liabilities: Notes payable Accounts Payable Total liabilities Owners' equity Capital Stock Retained Earnings 70,000 54,320 8,850 22,400 S 165,870 Total S In discussion with Pippin and by inspection of the accounting records, you discover the following facts 67,000 35,805 102.805 S 5,000 58,065 165,870 1. The amount of cash, $5,150, includes $3,400 in the company's bank account, $540 on hand in the company's safe, and $1,210 in Pippin's personal savings account 2. One of the notes receivable in the amount of $500 is an JOU that Pippin received in a poker game several years ago. The IOU is signed by "BK" who Pippin met at the game but has not heard from since 3. Office furniture includes $2,900 for a Persian rug for the office purchased on November 20. The total cost of the rug was $9,400. The business paid $2,900 in cash and issued a note payable to Zoltan Carpet for the balance due ($6,500). As no payment on the note is due until January, this debt is not included in the liabilities given here. 4. Also included in the amount for office furniture is a computer that cost $2.525 but is not on hand because Pippin donated it to a local charity. 5. The "Other Assets" of $22,400 represent the total amount of income taxes Pippin has paid the federal government over a period of years. Pippin believes the income tax law to be unconstitutional, and a friend who attends law school has promised to help Pippin recover the taxes paid as soon as he passes the bar exam. 6. The asset "Land was acquired at a cost of $39,000 but was increased to a valuation of $70,000 when one of Pippin's friends offered to pay that much for it if Pippin would move the building off the lot.