BioTekk is a new startup that currently owns lab equipment worth $100,000 and ha

Question

BioTekk is a new startup that currently owns lab equipment worth $100,000 and has cash on hand of $50,000 contributed by BioTekk?s owners. a) Prepare BioTekk?s balance sheet. b) Biotekk takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over five years. Prepare BioTekk?s balance sheet. c) Biotekk uses the cash from the bank plus $50,000 of its own funds to finance the development of a new drug that is subsequently patented. Prepare BioTekk?s balance sheet. d) Biotekk sells the patent for $300,000 and the lab equipment for $80,000 and pays off its debt. Prepare BioTekk?s balance sheet.

Explanation / Answer

Balance Sheet of Bio Tek a) Capital/ Liabilities 150000 Equipment 100000 Cash on Hand 50000 150000 150000 b) Capital/ Liabilities 150000 Equipment 100000 Notes Payable 50000 Cash on Hand 100000 Total 200000 Total 200000

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