Bizrate Electronics was organized on February 22, 2018, by Jon Jones and Billy Burt. Jon contributed $270,000 cash and SBUX stock (acquired 01/01/2017) worth $30,000 for 60% of Bizrate stock, while Billy contributed $200,000 cash for 40% of the stock. Jons social security number is 123-45-6789 and Billys is 987-65-4321. Bizrates employer ID number is 12-3456789. Bizrate began business on March 1, 2018. Bizrate is a retail electronics outlet located at 118812 Josey Lane, Louisville, KY 40018. Bizrate uses the accrual method of accounting, the first-in, first-out (FIFO) inventory method, and a calendar year.

income statement

Sales			4,700,000
	Returns and Allowances		(50,000)
			4,650,000
Beginning Inventory		0
Purchases		4,050,000
		4,050,000
Ending Inventory		(1,700,000)	(2,350,000)
Gross Profit			2,300,000
Expenses
	Salaries (a)	980,000
	Depreciation (b)	75,400
	Advertising	30,000
	Bad Debts	39,000
	Rent	100,000
	Interest (c)	39,500
	Utilities	38,300
	Delivery Expense	34,900
	Office Supplies	46,200
	Repairs and Maintenance	29,000
	Organization Expense (d)	6,000
	Meals and Entertainment	80,000
	Insurance Expense (e)	36,000
	Payroll Taxes	113,300
	2018 Federal Income Tax Deposits	250,000
	Other Taxes	20,000
	Fines and Penalties (Traffic)	1,000
	Accounting and Legal	12,000
	Charitable Contributions Red Cross	18,000
	Real Estate Taxes on Investment Land	800	1,949,400
			350,600
Other Income
	Gain on Sale of Stock (f)	4,000
	Sale of Delivery Truck (g)	8,600
	Interest on County Tax Exempt Bonds	1,100
	Interest on CDs	11,500
	Dividends from US Corporations (h)	5,600	30,800
Net Income			381,400

Bizrate Electronics, Inc.

Notes to Income Statement

1. Includes salaries: Jon Jones $200,000, Billy Burt $50,000
2. Depreciation for tax purposes $112,700
3. $2,500 is allocable to the investments in stock. The remainder is related to Bizrates business
4. $6,000 in fees were incurred in organizing Bizrate.
5. Includes $5,000 of premiums for term life insurance on Jon and Billy. Bizrate is the beneficiary of these policies. In addition, $4,300 of the health insurance premiums are attributable to coverage for Jon and his family, and $3,900 are attributable to coverage for Billy and his family.
6. Sold 500 shares of SBUX stock for $35,000 on December 1, 2018. The stock had been purchased by Jon on July 1, 2004 for $20,000 and was contributed by him on February 22, 2018, when it was worth $30,000. Also, on December 1, 2018 sold 100 shares of Grand View, Inc. for $2,000. The stock had been purchased on March 1, 2018 for $3,000. At no time did Bizrate own more than 1% of the outstanding stock of these corporations.
7. Sold a delivery truck on September 23, 2018 for $35,000. The Truck had originally been purchased on May 1, 2018 for $33,400. Depreciation taken for book purposes was $7,000. Depreciation taken for tax purposes was $9,350.
8. Bizrate owns less than 20% of the outstanding stock of each of these corporations.

Bizrate Electronics, Inc.

Balance Sheet