Andrea Scarlett is a realtor. She organized her business as a proprietorship, Andrea Scarlett, Realtor, by investing $19,000 cash. The business gave capital to her. Consider the following facts at September 30, 2012.
The business owes $61,000 on a note payable for land that the business acquired for a total price of $83,000.
The business spent $23,000 for a Zinka Banker real estate franchise, which entitles the business to represent itself as a Zinka Banker office. This franchise is a business asset.
Scarlett owes $80,000 on a personal mortgage for her personal residence, which she acquired in 2012 for a total price of $160,000.
Scarlett has $5,000 in her personal bank account, and the business has $9,000 in its bank account.
Scarlett owes $4,000 on a personal charge account with Chico's.
The office acquired business furniture for $15,000 on September 25. Of this amount, the business owes $2,000 on account at September 30.Office supplies on hand at the real estate office total $1,300.
- Scarlett was concerned about taxes. Which proprietorship feature limits Scarlett's business taxes?
- Prepare the balance sheet of the real estate business of Andrea Scarlett, Realtor, at September 30, 2012.
- Identify the personal items that would not be reported on the business records