Question

Required Information E1-4 Completing a Balance Sheet and Inferring Net Income [LO 1-2, LO 1-3] [The following information applies to the questions displayed below.] Ken Young and Kim Sherwood organized Reader Direct as a corporation: each contributed $49.000 cash to start the business and received 4.000 shares of stock. The store completed its first year of operations on December 31, 2017. On that date, the following financial items for the year were determined: cash on hand and in the bank. $47.500, amounts due from customers from sales of books, $26.900: equipment, $48.000, amounts owed to publishers for books purchased, $8,000: one-year notes payable to a local bank for $2.850. No dividends were declared or paid to the stockholders during the year. E1-4 Part 1 Required: 1. Complete the following balance sheet at December 31, 2017 Assets Cash Accounts Receivable Equipment READER DIRECT Balance Sheet At December 31, 2017 Liabilities Accounts Payable Notes Payable Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity

Answer 1

Balance sheet

At December 31, 2017

Assets		Liabilities
Cash	47,500	Accounts payable	8,000
Accounts receivable	26,900	Notes payable	2,850
Equipment	48,000	Total liabilities	10,850
		Stockholders' equity
		Common stock	98,000
		Retained earnings	13,550
		Total stockholders' equity	111,550
Total assets	$122,400	Total liabilities and stockholders' equity	$122,400

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