Lester's Home Healthcare Services was organized on January 1, 2003, by four friends. Each organizer invested $10,000 in the company and, in turn, was issued 8,000 shares of stock. To date, they are the only stockholders. During the first month (January 2003), the company had the following six events:

Required: 1. Was Lester's Home Healthcare Services organized as a sole proprietorship, a partnership, or a 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 tabulation that follows and to use plus ( + ) for increases and minus ( — ) for decreases for each account. The first event is used as an example. 3. Did you include the transaction between the two stockholders—Event (c)—in the tabulation? Why? 4. Based only on the completed tabulation, 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 stockholders' 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.

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a. Collected a total of $40,000 from the organizers and, in turn, issued the shares of stock. 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 (the mortgage is due in 15 years). (Hint: Five different accounts are affected.) c. One stockholder reported to the company that 500 shares of his Lester stock had been sold and transferred to another stockholder for $5,000 cash. d. Purchased short-term investments for $3,000 cash. e. Sold one acre of land for $4,000 cash to another company. f. Lent one of the shareholders $5,000 for moving costs, receiving a signed six-month note from the shareholder.