Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

East Hill Home Healthcare Services was organized five years ago by four friends who each invested $13,000 in the company and, in turn, were issued

image text in transcribed
East Hill Home Healthcare Services was organized five years ago by four friends who each invested $13,000 in the company and, in turn, were issued in total 8,600 shares of $100 par value common stock. To date, they are the only stockholders. At the end of last year, the accounting records reflected total assets of $726,000 ($59,000 cash: $502,000 land, $57,000 equipment, and $108,000 buildings), total liabilities of $220,000 (short-term notes payable $102,000 and long-term notes payable $118,000), and stockholders' equity of $506,000 ($21,000 common stock: $83.000 additional paid-in capital and $402,000 retained earnings). During the current year, the following summarized events occurred: a. Sold 10,700 additional shares of stock to the original organizers for a total of $108,000 cash. b. Purchased a building for $61,000, equipment for $10,000, and four acres of land for $21000; paid $9,000 in cash and signed a note for the balance (due in 15 years). (Hint: Five different accounts are affected.) c Sold one acre of land acquired in (b) for $5,250 cash to another company d. Purchased short-term investments for $11,500 cash. e. One stockholder reported to the company that 390 shares of his East Hill stock had been sold and transferred to another stockholder for $3.700 cash. f. Lent one of the shareholders $5,400 for moving costs and received a signed, six-month note from the shareholder. Required: 1. Was East Hill Home Healthcare Services organized as a sole proprietorship, a partnership, or a corporation? 2. During the current year, the records of the company were inadequate. You were asked to prepare the summary of transactions shown above. To develop a quick assessment of their economic effects on East Hill Home Healthcare Services, you have decided to complete the tabulation that follows and to use plus (+) for increases and minus (-) for decreases for each account. The first event is used as an example. 4. Based only on the completed tabulation, provide the following amounts: 5. Compute the current ratio for the current year Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Was East Hill Home Healthcare Services organized as a sole proprietorship, a partnership, or a corporation? The company was organized as a

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Chapters 14-23

Authors: Charles T. Horngren, Walter T. Harrison Jr, M. Suzanne Oliver

8th Edition

ISBN: 0136073018, 978-0136073017

More Books

Students also viewed these Accounting questions

Question

accouting 2 0 0 3 oklahoma state university

Answered: 1 week ago