Lester's Home Healthcare Services was established on January 1, 2009, by Jennifer Lester, who invested $40,000 in the company. During the first month (January 2009), the company had the following five events:
(a) Collected a total of $40,000 from owner Jennifer Lester.
(b) Purchased a building for $65,000, equipment for $16,000, and three acres of land for $12,000; paid $13,000 in cash and signed a note for the balance that is due to be paid in 15 years.
(c) Jennifer Lester personally lent $5,000 cash to another business.
(d) Purchased supplies for $3,000 cash.
(e) Sold one acre of land for $4,000 cash to another company.
Required:
1. Was Lester's Home Healthcare Services organized as a sole proprietorship, partnership, or corporation? Explain the basis for your answer.
2. During the first month, the records of the company were inadequate. You were asked to prepare the summary of the preceding transactions. To develop a quick assessment of their economic effects on Lester's Home Healthcare Services, you have decided to complete the spreadsheet that follows and to use plus ( + ) for increases and minus ( ˆ’ ) for decreases for each account. Transaction (a) is presented as an example.

3. How did you handle transaction (c) between Jennifer Lester and the other business? Why?
4. Based only on the completed spreadsheet, provide the following amounts (show computations):
a . Total assets at the end of the month.
b . Total liabilities at the end of the month.
c . Total owner's equity at the end of the month.
d . Cash balance at the end of the month.
e . Total current assets at the end of the month.
5. As of January 31, 2009, has the financing for Lester's Home Healthcare Services investment in assets primarily come from liabilities or owner's equity?

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Assets Liabilities Owner's Equity CashSupples Land Building EquipmentNotes Payable (a) +40,000 J. Lester, Capital +40,000