Hudson Alvarez is a realtor. He organized his business as a corporation on June 16, 2019. The business received $75,000 from Alvarez and issued common stock. Consider these facts as of June 30, 2019.

a. Alvarez has $17,000 in his personal bank account and $44,000 in the business bank account.

b. Alvarez owes $6,500 on a personal charge account with a local department store.

c. Alvarez acquired business furniture for $17,600 on June 24. Of this amount, the business owes $9,000 on accounts payable at June 30.

d. Office supplies on hand at the real estate office total $4,000.

e. Alvarez’s business owes $102,000 on a note payable for some land acquired for a total price of $162,000.

f. Alvarez’s business spent $16,000 for a Realty Experience franchise, which entitles him to represent himself as an agent. Realty Experience is a national affiliation of independent real estate agents. This franchise is a business asset.

g. Alvarez owes $179,000 on a personal mortgage on his personal residence, which he acquired in 2014 for a total price of $419,000.

Requirements

1. Prepare the balance sheet of the real estate business of Hudson Alvarez 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.