Two businesses, Queens Service Corp. and Insley Sales Co., have sought business loans from you. To decide whether to make the loans, you have requested their balance sheets.

Requirement

1. Using only these balance sheets, to which entity would you be more comfortable lending money? Explain fully, citing specific items and amounts from the respective balance sheets. (Challenge)

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A1 Queens Service Corp. Balance Sheet August 31, 2019 Assets 2 Liabilities 3 Cash 4 Accounts receivable 5 Land 6 Furniture 7 Equipment 5,000 Accounts payable 10,000 Note payable 75,000 Total liabilities 15,000 45,000 Stockholders' equity Total liabilities and $ 150,000 stockholders' equity 50,000 80,000 130,000 Stockholders' Equity 20,000 9 Total assets 10 150,000 A1 Insley Sales Co. Balance Sheet August 31, 2019 Assets 2 3 Cash 4 Accounts receivable 5 Merchandise inventory 6 Building Liabilities 5,000 Accounts payable 10,000 Note payable 15,000 Total liabilities 6,000 9,000 15,000 35,000 Stockholders' Equity Stockholders' equity Total liabilities and stockholders' equity 50,000 9 Total assets 10 65,000 65,000