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Cash [The following information applies to the questions displayed below.) The accounting records of Nettle Distribution show the following assets and liabilities as of December

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Cash [The following information applies to the questions displayed below.) The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2014 and 2015 December 31 2014 2015 $ 51,841 $ 9,578 Accounts receivable 28,140 22,062 Office supplies 4,439 3,251 Office equipment 136,260 145,143 Trucks 53,320 62,320 Building 0 177,748 Land 44,355 Accounts payable 73,980 36,692 Note payable 0 122,103 0 Late in December 2015, the business purchased a small office building and land for $222,103. It pald $100,000 cash toward the purchase and a $122,103 note payable was signed for the balance. Mr. Nettle had to invest $36,000 cash in the business (in exchange for common stock) to enable it to pay the $100,000 cash. The business also pays $2,600 cash per month for dividends. Required: 1. Prepare balance sheets for the business as of December 31, 2014 and 2015. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.) NETTLE DISTRIBUTION Balance Sheet December 31, 2014 Liabilities Assets Accounts payable Accounts receivable Equity ity lities and equity $ Advertising expense Automobiles NETTLE DISTRIBUTION Balance Sheet December 31, 2015 Liabilities Assets Accounts payable Accounts receivable Advertising expense Automobiles lities Equity ity lities and equity Building $ 0 Cash NETTLE DISTRIBUTION Balance Sheet 015 Computer supplies Liabilities Consulting fees earned Delivery services revenue Drafting equipment Engineering fees earned Totarabilities Equity Total equity 0 Total liabilities and equity Total assets $ $ 0 2. By comparing equity amounts from the balance sheets and using the additional information presented in this problem, prepare a calculation to show how much net income was earned by the business during 2015. Equity, December 31, 2014 0 Add: Dividends Add: Net income Add: Stock issuances $ 0

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