Melody Lane Music Company was started by John Ross early in $2024.$ Initial capital was acquired by issuing shares of common stock to various investors and obtaining a bank loan. The company operates a retail store that sells records, tapes, and compact discs. Business was so good during the first year of operations that John is considering opening a second store on the other side of town. The funds necessary for expansion will come from a new bank loan. In order to approve the loan, the bank requires financial statements.

John asks for your help in preparing the balance sheet and presents you with the following information for the year ending December $31,2024$:

Cash receipts consisted of the following:

From customers $ $434,500$

From issue of common stock $160,000$

From bank loan $124,000$

Cash disbursements were as follows:

Purchase of inventory $ $312,000$

Rent $30,000$

Salaries $42,000$

Utilities $17,000$

Insurance $15,000$

Purchase of equipment $52,000$

The bank loan was made on March $31,2024.$ A note was signed requiring payment of interest and principal on March $31,2025.$ The interest rate is $10\%.$

The equipment was purchased on January $3,2024,$ and has an estimated useful life of $10$ years with no anticipated salvage value. Depreciation per year is $$5,200.$

Inventory on hand at the end of the year cost $$112,000.$

Amounts owed at December $31,2024,$ were as follows:

To suppliers of inventory $ $32,000$

To the utility company $2,000$

Rent on the store building is $$2,000$ per month. On December $1,2024,$ four months' rent was paid in advance.

Net income for the year was $$88,000.$ Assume that the company is not subject to federal, state, or local income tax.

Two hundred thousand shares of no par common stock are authorized, of which $32,000$ shares were issued and are outstanding.

Required:

Prepare a balance sheet at December $31,2024.$ Include headings for each classification, as well as titles for each classification$$s subtotal.

Note: Amounts to be deducted should be indicated by a minus sign.