Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $71,050 cash to start the business and received 5,800 shares. The store completed its first year of operations on December 31, 2020. On that date, the following financial items for the year were determined: cash on hand and in the bank, $57,400; amounts due from customers from sales of books, $38,600; property and equipment, $88,500; amounts owed to publishers for books purchased, $13,400; one-year note payable to a local bank for $10,950. No dividends were declared or paid to the shareholders during the year. Required: 1. Complete the balance sheet at December 31, 2020: Cash Accounts receivable Property and equipment Total assets Assets READER DIRECT Balance Sheet At December 31, 2020 57,400 Accounts payable 38,600 Note payable 88,500 Liabilities 13,400 10,950 Total liabilities 24,350 Shareholders' equity Common shares 142,100 Retained earnings 18,050 Total shareholders' equity 160,150 $ 184,500 Total liabilities & shareholders' equity $ 184,500
Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $71,050 cash to start the business and received 5,800 shares. The store completed its first year of operations on December 31, 2020. On that date, the following financial items for the year were determined: cash on hand and in the bank, $57,400; amounts due from customers from sales of books, $38,600; property and equipment, $88,500; amounts owed to publishers for books purchased, $13,400; one-year note payable to a local bank for $10,950. No dividends were declared or paid to the shareholders during the year. Required: 1. Complete the balance sheet at December 31, 2020: Cash Accounts receivable Property and equipment Total assets Assets READER DIRECT Balance Sheet At December 31, 2020 57,400 Accounts payable 38,600 Note payable 88,500 Liabilities 13,400 10,950 Total liabilities 24,350 Shareholders' equity Common shares 142,100 Retained earnings 18,050 Total shareholders' equity 160,150 $ 184,500 Total liabilities & shareholders' equity $ 184,500
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 56P
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Transcribed Image Text:Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $71,050 cash to start the business and
received 5,800 shares. The store completed its first year of operations on December 31, 2020. On that date, the following financial
items for the year were determined: cash on hand and in the bank, $57,400; amounts due from customers from sales of books,
$38,600; property and equipment, $88,500; amounts owed to publishers for books purchased, $13,400; one-year note payable to a
local bank for $10,950. No dividends were declared or paid to the shareholders during the year.
Required:
1. Complete the balance sheet at December 31, 2020:
Cash
Accounts receivable
Property and equipment
Total assets
Assets
READER DIRECT
Balance Sheet
At December 31, 2020
57,400
Accounts payable
38,600
Note payable
88,500
Liabilities
13,400
10,950
Total liabilities
24,350
Shareholders' equity
Common shares
142,100
Retained earnings
18,050
Total shareholders' equity
160,150
$ 184,500 Total liabilities & shareholders' equity
$ 184,500
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