Reference no: EM132796133

Problem - John Smith and Lynn Jones organized Smith and Jones Fitness as a corporation; each contributed $50,000 cash to start the business and received 5,000 shares of common stock. The store completed its first year of operations on December 31, Year 1. On that date, the following financial items for the year were determined: cash on hand and in the bank , $55,400; amounts due from customers from sales of books, $27,000; unused portion of store and office equipment, $80,000; amounts awed to publishers for books purchased, $12,000' on-year note payable to a local bank for $3,000; interest payable on bank note of $430; and a retained earnings balance after recording all transactions of $46,970. No dividends were declared or paid to the stockholders during the year.

Required -

a. Complete the balance sheet as of December 31, Year 1.

b. What was the amount of net income for the year?