Question

Marion Boats, Inc. ruck salesman for many years, while Bill, his brother, worked a book salesman for a major publishing house. Although they had done fairly well financially. Fred Cunningham was a fire t they wanted to "be their own bosses," so they decided to go into business together They agreed that selling small fishing and recreational boats would be a good line for them to Also, the small town Marion, Mississippi, where they lived, did not have any boat dealerships. The nearest dealer was go into as both had been interested in fishing and boating for many years. some 95 miles away After some searching, they chose a suitable site for their proposed operation. It was situated at a popular local dock. A dilapidated building which had been condemned by the local authorities stood on the site. At this point in time, the brothers decided to incorporate the business. The services of a o handle all aspects of the execution of the lawyer were obtained to draw up the legal papers and t incorporation. The fee for this service was $800, and each of the brothers paid half of it. purchased 500 shares for $20,000. company's shares On October 1, 2005, Fred purchased 1,800 shares of the company's stock for $72,000, and Bill The payment for legal services was considered part of these investments, so the actual cash received by the new company was $91,200. Further purchases of the could be made only at the prevailing book value per share at the time of the and only if both parties agreed to the transaction. If either brother wished at any time to ell his shares back to the company, this transaction would also be conducted at the prevailing book value of the shares. The brothers also agreed that they should each receive salaries of $24,000 per year at all times during which they were engaged in the company's business on a full-time basis ary purchase this amount was less than they could earn in other jobs, but they realized a small sal was needed at this time to ensure that the dealership could pay its bills on time On November 1, 2005, with the aid of a $40,000 bank loan and $32,000 of the company's money, Fred purchased the property which had been selected. The same day, he left his job to devote his full attention to the new enterprise First, Fred arranged to have the old building demolished. A cursory examination revealed there was nothing of any significance that could be salvaged, except for some building stone. Mr

question 1 please

Answer 1

Date(2005-06)	Particular	L.F	Debit	Credit
N.A.