Exhibit 1. Initial Requirements and Activities Item Number Description 1 Investment by the former patient 2 Equity for Dr. Black in exchange for patent 3 Purchase of machinery in cash to manufacture the device (Estimated life 10 years; no salvage value) 4 Purchase of raw material inventory (in cash) 5 Loan (5 years at 10 percent) Amount $50,000 25,000 40,000 15,000 20,000

1. Assuming the activities in Exhibit 1 actually take place prepare a balance sheet as of the completion of item 5. To do so, draw up a basic balance sheet format and make entries to the appropriate accounts for each event. Leave sufficient space below each asset, liability, and equity account to make several entries.