The accounting records of Carmen Creek Gourmet Meats show the following assets and liabilities as of the end of 2023 and 2022:

During 2023, Carmen Munch, the owner, purchased a small office building and moved the business from rented quarters to the new building. The building and the land it occupies cost $650,000. The business paid $130,000 in cash and a note payable was signed for the balance. Munch had to invest an additional $50,000 to enable it to pay the $130,000. The business earned a profit during 2023, which enabled Munch to withdraw $2,000 per month from the business for personal use.

Required
1. Prepare balance sheets for the business as of the end of 2022 and the end of 2023.
2. Prepare a calculation to show how much profit was earned by the business during 2023.

Analysis Component:
Assets increased from $279,000 at December 31, 2022, to $936,000 at December 31, 2023. Using numbers wherever possible, explain how these assets were financed.

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Cash Accounts receivable Office supplies Office equipment Machinery Land Building Accounts payable Notes payable December 31 2023 2022 $ 20,000 $ 28,000 60,000 50,000 25,000 20,000 120,000 120,000 61,000 61,000 130,000 520,000 30,000 10,000 520,000