P2 2 Determining Financial Statement Effects of various Transactions LOR 2, 22,25 East Hill Home Healthcare Services was organized by four friends who each invested $13.000 in the company and, in turn, was issued 8.500 shares of $1.00 par value stock. To date, they are the only stockholders. At the end of last year, the accounting records reflected total assets of $743 000 ($62.000 cash; $518,000 land: $59.000 equipment and $104.000 buildings), total liabilities of $222.000 (short-term robos payable of $113,000 and long-term notes payable of $109,000), and stockholders equity of $521.000 (S22,000 of common stock, S90,000 of additional paid in capital and $409.000 retained earnings). During the current year, the following summarized events occurred: a Sold 9600 additional shares of stock to the original organizers for a total of $91.000 cash b. Purchased a building for $56.000, equipment for $18,000, and four acres of land for $18,000; paid $12,000 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 $4.500 cash to another company d. Purchased short-term investments for $11.000 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 $3900 cash f. Lent one of the shareholders $5,500 for moving costs, receiving 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 the preceding transactions. To develop a quick assessment of their economic effects on East H 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. Change 4. Based only on the completed tabulation, provide the following amounts: 5. Compute the current ratio for the current year. (Round your answer to 2 decimal places.) P2 2 Determining Financial Statement Effects of various Transactions LOR 2, 22,25 East Hill Home Healthcare Services was organized by four friends who each invested $13.000 in the company and, in turn, was issued 8.500 shares of $1.00 par value stock. To date, they are the only stockholders. At the end of last year, the accounting records reflected total assets of $743 000 ($62.000 cash; $518,000 land: $59.000 equipment and $104.000 buildings), total liabilities of $222.000 (short-term robos payable of $113,000 and long-term notes payable of $109,000), and stockholders equity of $521.000 (S22,000 of common stock, S90,000 of additional paid in capital and $409.000 retained earnings). During the current year, the following summarized events occurred: a Sold 9600 additional shares of stock to the original organizers for a total of $91.000 cash b. Purchased a building for $56.000, equipment for $18,000, and four acres of land for $18,000; paid $12,000 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 $4.500 cash to another company d. Purchased short-term investments for $11.000 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 $3900 cash f. Lent one of the shareholders $5,500 for moving costs, receiving 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 the preceding transactions. To develop a quick assessment of their economic effects on East H 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. Change 4. Based only on the completed tabulation, provide the following amounts: 5. Compute the current ratio for the current year. (Round your answer to 2 decimal places.)