PLEASE HELP ON THE INCORRECT ANSWERS UNDER "STOCKHOLDERS EQUITY"

Chapter 2 Question 4

E2-15 Analyzing and Recording Transactions, and Preparing and Evaluating a Balance Sheet [LO 2-2, LO 2-3, LO 2-4, LO 2-5]

Business Sim Corp. (BSC) issued 1,000 common shares to Kelly in exchange for $15,000. BSC borrowed $36,000 from the bank, promising to repay it in two years. BSC purchased computer equipment for $47,000, signing a six-month note for $6,000, and paying the balance with check number 101. BSC received $750 of supplies purchased on account. BSCs loan contains a clause (covenant) that requires BSC to maintain a ratio of current assets to current liabilities of at least 1.5.

Assuming BSC entered into no other activities during its first year ended September 30, prepare the companys classified balance sheet. Include a balance of zero in Retained Earnings.

Assets Current Assets Answer is complete but not entirely correct. BUSINESS SIM CORP Balance Sheet At September 30 Liabilities Current Liabilities Accounts Payable 10,000 Notes Payable (short-term) 750 10,750 Total Current Liabilities Notes Payable (long-term) 47,000 $ 750 6,000 Cash Supplies Total Current Assets 6,750 36,000 Equipment > > 42,750 x Total Liabilities Stockholders' Equity Common Stock Common Stock Common Stock Total Stockholders' Equity Total Liabilities and Stockholders' Equity 15,000 15,000 Total Assets $ 57,750 $ 57,750