Question - Richard Hunter is a realtor. He organized the business as a corporation on June 16, 2017. The business received $ 80,000 cash from Hunter and issued common stock. Consider the following facts as of June 30, 2017.
a. Hunter has $12,000 in his personal bank account and $46,000 in the business bank account.
b. Hunter owes $4,7000 on a personal change account at a local department store.
c. Hunter acquired business furniture for $11,400 on June 24. Of this amount, the business owes $5,000 on accounts payable at June 30.
d. Office supplies on hand at the real estate office total $3,000.
e. Hunter's business owes $137,000 on a note payable for some land acquired for a total price of $154,000
f. Hunter's business spent $21,000 for a Realty Region franchise, which entitles him to represent himself as an agent. Realty Region is a national affiliation of independent real estate agents. This franchise is a business asset.
g. Hunter owes $200,000 on a personal mortgage on his personal residence, which he acquired in 2012 for a total price of $346,000.
1. Prepare the balance sheet of the real estate business of Richard Hunter Realtor, Inc., at June 30, 2017.
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.