Question 3 - Balance Sheets (22 points) Patriots, Inc. is a retail store that started on January 1, 2018. Initial capital was acquired by issuing shares of common stock and by obtaining a bank loan. The CFO, Tom Brady, has kept the records below and is asking for your help in preparing a balance sheet for the year ended December 31. 2018. Cash receipts (January 1 - December 31, 2018) From customers From issuance of common stock From bank loan Total $484.800 195,000 120.000 $799,800 Cash payments (January 1 - December 31, 2018) Purchase of inventory Rent Utilities Salaries Insurance Purchase of equipment Total $319,000 45,000 49,000 24.000 22.000 60,000 $519,000 On March 31, 2018, Patriots borrowed $120.000 at 10%. The note is payable on March 31, 2023 with annual interest payments. The equipment was purchased on January 1, 2018, and has an estimated useful life of 5 years with salvage value of $10,000. Equipment is depreciated using the straight-line method. Inventory on hand at December 31, 2018 costs $119.000. The following amounts are owed at December 31, 2018 o o $39,000 to inventory suppliers $3,000 to utility company Rent for the retail space is $2,000 per month. $45,000 of rent was paid in advance on January 1, 2018 Net income for the year was $104,800 (Ignore taxes). 300,000 shares of no par common stock are authorized and 39,000 shares are issued and outstanding at December 31, 2018. Required: Prepare a classified balance sheet for Patriots, Inc. at December 31, 2018. Use the template on the next page for your answer. Question 3 - Balance Sheets (22 points) Patriots, Inc. is a retail store that started on January 1, 2018. Initial capital was acquired by issuing shares of common stock and by obtaining a bank loan. The CFO, Tom Brady, has kept the records below and is asking for your help in preparing a balance sheet for the year ended December 31. 2018. Cash receipts (January 1 - December 31, 2018) From customers From issuance of common stock From bank loan Total $484.800 195,000 120.000 $799,800 Cash payments (January 1 - December 31, 2018) Purchase of inventory Rent Utilities Salaries Insurance Purchase of equipment Total $319,000 45,000 49,000 24.000 22.000 60,000 $519,000 On March 31, 2018, Patriots borrowed $120.000 at 10%. The note is payable on March 31, 2023 with annual interest payments. The equipment was purchased on January 1, 2018, and has an estimated useful life of 5 years with salvage value of $10,000. Equipment is depreciated using the straight-line method. Inventory on hand at December 31, 2018 costs $119.000. The following amounts are owed at December 31, 2018 o o $39,000 to inventory suppliers $3,000 to utility company Rent for the retail space is $2,000 per month. $45,000 of rent was paid in advance on January 1, 2018 Net income for the year was $104,800 (Ignore taxes). 300,000 shares of no par common stock are authorized and 39,000 shares are issued and outstanding at December 31, 2018. Required: Prepare a classified balance sheet for Patriots, Inc. at December 31, 2018. Use the template on the next page for your
