Problem 3-10 (Algo) Balance sheet preparation [LO3-2, 3-3] Melody Lane Music Company was started by John Ross early in 2021. Initial capital was acquired by issuing shares of common stock to various investors and by 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, 2021: a. Cash receipts consisted of the following: From customers From issue of common stock From bank loan $419,500 140,000 110,000 b. Cash disbursements were as follows: Purchase of inventory $308,000 Rent 30,000 Salaries 38,000 Utilities 13,000 Insurance 11,000 Purchase of equipment 48,000