Prepare balance sheet as of January 31

PeterStores, Inc.

1.On January 1,PeterincorporatesPeterStores, Inc., a DVD store.Hecontributes$25,000cash.Peteris the sole owner.

2.On January 1,thecorporationborrows $12,500 from a bank.

3.On January 1,thebusinessbuys inventory (merchandize for sale) in the amount of $5,000 paying cash.

4.On January 1,the business purchasesa three-year insurance policy for $1,224 paying cash.

The company also recordsthe following transactionsin January:

5.Thecompanybuysinventory for $5,000, agreeing to pay within60 days.

6.Thecompanypurchasesland for $24,000bypayingcash$6,000 andtakinga 10-year mortgage for $18,000 (assume zero interest rate).

7.Thecompanysellshalf of this land for $12,000. It receives$3,000 cash and the buyer assumes$9,000 of the mortgage; that is,the company is no responsible for this half.

8.Peterreceivesan acquisition offer of $53,000 for the business; he rejectsthe offer, because itisevident that themarket value of thestore's assetsis$56,000.

9.Peterwithdraws$1,000 cash from the store's bank account for his wage (thatis,Peterworks for thecompanyand the amount of $1,000 is his wage).

10.Petertakesinventorycosting $750 from the storefor his personal use(assume this is a loan from the corporation toPeter, thus,Peteris obliged to return it).

11.Peterfindsout that the individual that purchased the land sold it for $14,000. The part still owed by the businessisidentical in value.

12.The storepaysoff $6,000 of itsmortgage(assume zero interest rate).

13.Petersellsone-thirdof the stock he ownsinPeterStores, Inc. for $11,000 cash.

14.The company sells on credit inventory that costs $5,000 for $9,000.