P1-64A. (Learning Objectives 2, 3, 4: Apply underlying accounting concepts; evaluatebusiness operations; construct a balance sheet) Brandon Hilton is a realtor. He organized hisbusiness as a corporation on June 16, 2019. The business received $65,000 cash from Hiltonand issued common stock. Consider the following facts as of June 30, 2019:a. Hilton has $15,000 in his personal bank account and $55,000 in the business bank account.b. Hilton owes $3,400 on a personal charge account at a local department store.c. Hilton acquired business furniture for $30,000 on June 24. Of this amount, the businessowes $16,000 on accounts payable at June 30.d. Office supplies on hand at the real estate office total $8,000.e. Hilton’s business owes $112,000 on a note payable for some land acquired for a totalprice of $165,000.f. Hilton’s business spent $20,000 for a Realty Universe franchise, which entitles him torepresent himself as an agent. Realty Universe is a national affiliation of independentreal estate agents. This franchise is a business asset.g. Hilton owes $182,000 on a personal mortgage on his personal residence, which heacquired in 2014 for a total price of $334,000.Requirements1. Prepare the balance sheet of the real estate business of Brandon Hilton Realtor, Inc., atJune 30, 2019.2. 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 thebalance sheet of the business.
P1-64A. (Learning Objectives 2, 3, 4: Apply underlying accounting concepts; evaluate
business operations; construct a
business as a corporation on June 16, 2019. The business received $65,000 cash from Hilton
and issued common stock. Consider the following facts as of June 30, 2019:
a. Hilton has $15,000 in his personal bank account and $55,000 in the business bank account.
b. Hilton owes $3,400 on a personal charge account at a local department store.
c. Hilton acquired business furniture for $30,000 on June 24. Of this amount, the business
owes $16,000 on accounts payable at June 30.
d. Office supplies on hand at the real estate office total $8,000.
e. Hilton’s business owes $112,000 on a note payable for some land acquired for a total
price of $165,000.
f. Hilton’s business spent $20,000 for a Realty Universe franchise, which entitles him to
represent himself as an agent. Realty Universe is a national affiliation of independent
real estate agents. This franchise is a business asset.
g. Hilton owes $182,000 on a personal mortgage on his personal residence, which he
acquired in 2014 for a total price of $334,000.
Requirements
1. Prepare the balance sheet of the real estate business of Brandon Hilton Realtor, Inc., at
June 30, 2019.
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.
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