Sandy White is a realtor. She organized her business as a corporation, Sandy White, Realtor, P.C. (Professional

Question:

Sandy White is a realtor. She organized her business as a corporation, Sandy White, Realtor, P.C. (Professional Corporation), by investing $27,000 cash.

The business issued common stock to her. Consider the following facts at

May 31, 2012:

a. The business owes $62,000 on a note payable for land that the business acquired for a total price of $80,000.

b. The business spent $26,000 for a Minko Banker real estate franchise, which entitles the business to represent itself as a Minko Ranker office. This franchise is a business asset.

c. White owes $70,000 on a personal mortgage for her personal residence, which she acquired in 2012 for a total price of $130,000.

d. White has $4,000 in her personal bank account, and the business has $13,000 in its bank account.

e. White owes $3,000 on a personal charge account with Chico’s.

f. The office acquired business furniture for $20,000 on May 25. Of this amount, the business owes $5,000 on account at May 31.

g. Office supplies on hand at the real estate office total $1,100.

Requirements

1. White was concerned about liability exposure. Which corporate feature limits White’s personal liability?

2. Prepare the balance sheet of the real estate business of Sandy White, Realtor, P.C., at May 31, 2012.

3. Identify the personal items that would not be reported on the businessrecords.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...