Chris's Beamer Biz, Inc., Year 1 - 20X1 You have decided to go into the business of selling Beamers. You decide to operate the business as a corporation, Chris's Beamer Biz, Inc. On January 1, 20X1 you begin with $30,000 cash; $20,000 of the money is yours and $10,000 is borrowed from your Uncle Mike. For the $20,000 of yours, you issue yourself 100 shares of common stock. For the $10,000 borrowed from your uncle, you sign a note agreeing to pay back that amount on December 31, 20X4 and you will pay interest at 10% at the end of each year. On January 1, 20X1, you bought 11 Beamers for $3,000 each. During the year you sold 8 Beamers for $8,000 each. You also paid a security deposit of $2,000, advertising expense of $4,000 and 12 months' rent of $15,000. In addition to the cash you invested on January 1st, on August 1st you also invest a piece of land that you own into the business that is worth $40,000 in exchange for 200 more shares of stock. You pay the first year's interest to Uncle Mike of $1,000 on December 31 of 20X1. Your tax rate is 30% of your income before taxes and you paid 50 % of these taxes this year and will pay the rest in 20X2. So how did you do? Prepare Journal Entries, T-Accounts, and Financial Statements 87

You have decided to go into the business of selling Beamers. You decide to operate the business as a corporation, Chris's Beamer Biz, Inc. On January 1, 20X1 you begin with $30,000 cash; $20,000 of the money is yours and $10,000 is borrowed from your Uncle Mike. For the $20,000 of yours, you issue yourself 100 shares of common stock. For the $10,000 borrowed from your uncle, you sign a note agreeing to pay back that amount on December 31,20X4 and you will pay interest at 10% at the end of each year. On January 1,20X1, you bought 11 Beamers for $3,000 each. During the year you sold 8 Beamers for $8,000 each. You also paid a security deposit of $2,000, advertising expense of $4,000 and 12 months' rent of $15,000. In addition to the cash you invested on January 1st, on August 1st you also invest a piece of land that you own into the business that is worth $40,000 in exchange for 200 more shares of stock. You pay the first year's interest to Uncle Mike of $1,000 on December 31 of 20X1. Your tax rate is 30% of your income before taxes and you paid 50% of these taxes this year and will pay the rest in 20X2. So how did you do? Prepare Journal Entries, T-Accounts, and Financial Statements