Balance Sheet and Income Statement Exercise I. John Smith puts $10,000 in cash in his new ACE hardware business. 2. ACE borrows $100.,000 from the bank in which the principle will be paid back five years from now and interest will be paid at the end of each year. The interest rate is 5%. 3. ACE buys a warehouse for $40,000. ACE gives $4,000 as a down payment and the rest will be mortgaged. 4. ACE purchases a delivery truck for $10,000 in cash. 5. ACE buys $50,000 of inventory with cash. 6. ACE buys S10,000 worth of equipment. It plans to pay for the equipment in thirty days. 7. ACE sells $10,000 worth of goods to a mining company. The cost for the goods was $4,000. 8. A $20.000 order was sold to an electric company, which plans to pay ACE in 15 days. The material cost was $15,000. 9. ACE purchases a Certificate of Deposit (CD) at the bank for $10.000. It will mature in six months 10. John wants to expand his business by opening another store. To expand he will need $100,000. The bank refuses to lend him any more money. Therefore, ACE sells 50,000 shares of stock for $2 a share. The stock has a par value of .10 a share. 11. ACE buys, with cash, a new building for $40.000, land for $20,000 and pays for the equipment he bought last month. 12. After one year of operation ACE pays interest on its $100.000 loan from the bank. 13. ACE paid $2.000 on the principle part of its warehouse loan and $1,000 in interest for a total payment of $3,000. 14. ACE pays out $2.000 in dividends