The accounting records of Carmen Creek Gourmet Meats show the following assets and liabilities as of the end of 2014 and 2013:

During 2014, Carmen Munch, the owner, purchased a small office building and moved the business from rented quarters to the new building. The building and the land it occupies cost $650,000. The business paid $130,000 in cash and a note payable was signed for the balance. Munch had to invest an additional $50,000 to enable it to pay the $130,000. The business earned a net income during 2014, which enabled Munch to withdraw $2,000 per month from the business for personal use.
Required
1. Prepare balance sheets for the business as of the end of 2013 and the end of 2014.
2. Prepare a calculation to show how much net income was earned by the business during 2014.
Analysis Component: Assets increased from $279,000 at December 31, 2013, to $936,000 at December 31, 2014. Using numbers wherever possible, explain how these assets were financed.

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December 31 2014 20,000 $ 28,000 2013 Cash Accounts receivable... 60,000 50,000 Office suppliesu25,000 20,000 Office equipment120,000 120,000 Machinerymaan61,000 and130,000 Buildingna Accounts payable. Notes payable...520,000 61,000 520,000 30,000 10,000