cynthia a sole proprietor was engaged in a service business and reported her income on the cash basis on february 2 20/

/in /by

Liabilities and Stockholder’s Equity
Liabilities:
Accounts payable-trade …………………………………………………… $ 120,000
Notes payable-bank …………………………………………………………. 360,000
Stockholder’s equity:
Common stock ………………………………………………………………. 720,000
Total ………………………………………………………………………. $1,200,000
Discuss the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation.