(Solved) : East Hill Home Healthcare Services Organized Four Friends Invested 15 000 Company Turn Iss Q26379767 . . .

East Hill Home Healthcare Services was organized by four friendswho each invested $15,000 in the company and, in turn, was issued8,200 shares of $1.00 par value stock. To date, they are the onlystockholders. At the end of last year, the accounting recordsreflected total assets of $732,000 ($55,000 cash; $518,000 land;$53,000 equipment; and $106,000 buildings), total liabilities of$224,000 (short-term notes payable of $118,000 and long-term notespayable of $106,000), and stockholders’ equity of $508,000 ($22,000of common stock, $87,000 of additional paid-in capital, and$399,000 retained earnings). During the current year, the followingsummarized events occurred:

Sold 10,100 additional shares of stock to the originalorganizers for a total of $107,000 cash.

Purchased a building for $52,000, equipment for $15,000, andfour acres of land for $21,000; paid $11,000 in cash and signed anote for the balance (due in 15 years). (Hint: Fivedifferent accounts are affected.)

Sold one acre of land acquired in (b) for $5,250 cashto another company.

Purchased short-term investments for $12,000 cash.

One stockholder reported to the company that 360 shares of hisEast Hill stock had been sold and transferred to anotherstockholder for $3,100 cash.

Lent one of the shareholders $5,100 for moving costs, receivinga signed six-month note from the shareholder.

Required:

1. Was East Hill Home Healthcare Servicesorganized as a sole proprietorship, a partnership, or acorporation?

Sole proprietorship
Partnership
Corporation

2. During the current year, the records of thecompany were inadequate. You were asked to prepare the summary ofthe preceding transactions. To develop a quick assessment of theireconomic effects on East Hill Home Healthcare Services, you havedecided to complete the tabulation that follows and to use plus (+)for increases and minus (−) for decreases for each account. Thefirst event is used as an example.

 

4. Based only on the completed tabulation,provide the following amounts:

 

5. Compute the current ratio for the currentyear.

 

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