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Jones, Mitchell, Carey, and Gorman are knowledgeable about landscape design. They have decided to pool their knowledge and resources to form Arrington Enterprises Inc., a C corporation. They will provide professional services to area businesses and homeowners. All participants expect to work full time for Arrington Enterprises, and each expects to contribute sufficient assets to become a 25% shareholder with a total stock equity of $50,000 each. In addition to the skills that each brings to the new entity, the owners will contribute assets that will enhance the company's ability to provide quality technical design and planning services. These assets include a building, land, lawn care equipment, office furniture and equipment, and cash for initial operating expenses. The assets contributed by each shareholder, along with any related liabilities assumed by the corporation, are provided in the exhibit. Complete the Arrington Enterprises Inc. U.S. GAAP-basis financial balance sheet at formation by entering the correct values in each of the associated cells in column B of the table below. Also enter the tax basis of each asset in the associated cells of column C below. Enter all amounts as positive amounts. If a response is zero, enter a zero (0).

A B C

1

2 Balance Sheet at Formation and Corporate Tax Basis in Property

3 B) Balance Sheet C) Tax Basis

4 A) Cash B) C)

5 A) Property contributed by:

6 A) Jones B) C)

7 A) Mitchell B) C)

8 A) Carey B) C)

9 A) Gorman B) C)

10 A)Total assets B) $0 C) $0

11 A) Liabilities B)

12 A) Stockholders' equity B) $200000

13 A) Total liabilities and stockholders' equity B) $200000

Shareholder Contributions Shareholder Contributions to Arrington Enterprises Inc. Shareholder Contributions Shareholder Contributions to Arrington Enterprises Inc