Shawn Steele is a realtor. He buys and sells properties on his own, and he also earns commission revenue as a real estate agent. He organized his business as a sole proprietorship on November 15, 2013. Consider the following facts as of November 30, 2013:
a. The business owed $30,000 on a note payable for some undeveloped land. This land had been acquired by the business for a total price of $70,000.
b. Steele's business had spent $15,000 for a Re/Max Ltd. real estate franchise, which entitled him to represent himself as a Re/Max agent. Re/Max is a national affiliation of independent real estate agents. This franchise is a business asset.
c. Steele owed $250,000 on a personal mortgage on his personal residence, which he acquired in 2001 for a total price of $500,000.
d. Steele had $25,000 in his personal bank account and $9,000 in his business bank account.
e. Steele owed $1,000 on a personal charge account with The Bay.
f. The business acquired business furniture for $9,000 on November 25. Of this amount, the company owed $3,000 on account at November 30.
g. The real estate office had $500 worth of office supplies on hand on November 30.
Required
1. Steele is concerned about liability exposure. Which proprietorship feature, if any, limits his personal liability?
2. Prepare the balance sheet of the real estate business of Shawn Steele, Realtor, at November 30, 2013.
3. Identify the personal items given in the preceding facts that would not be reported in the financial records of the business.