Question

East Hill Home Healthcare Services was organized five years ago by four friends who each invested $15,000 in the company and, in turn, were issued in total 8,500 shares of $1.00 par value common stock. To date, they are the only stockholders. At the end of last year, the accounting records reflected total assets of $731,000 ($55,000 cash: $517,000 land: $53,000 equipment, and $106,000 buildings), total liabilities of $226,000 (short-term notes payable $107.000 and long-term notes payable $119,000), and stockholders equity of $505,000 ($21,000 common stock: $83,000 additional paid-in capital; and $401,000 retained earnings). During the current year, the following summarized events occurred: a. Sold 10,600 additional shares of stock to the original organizers for a total of $98,000 cash. b. Purchased a building for $56,000, equipment for $12,000, and four acres of land for $21,000; 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 $19,000 cash. e. One stockholder reported to the company that 330 shares of his East Hill stock had been sold and transferred to another stockholder for $3,400 cash. f. Lent one of the shareholders $5,300 for moving costs and received a signed, six-month note from the shareholder.

Answer 1

Answer:

Total assets = 124950+19000+5300+532750+162000+65000=	909000
Total Liabilities = 107000+199000=	306000
Total stockholders' Equity = 31600+170400+401000=	603000
Cash balance =	124950
Total current assets = 124950+19000+5300=	149250

Worksheet:

		Assets				Liabilities		Stockholders'	Equity
	Cash	Short term investments	Notes Receivable	Land	Building	Equipment	Short-term Notes payable	Long-term Notes payable	Common Stock	Additional paid in capital	retained Earnings
Beg	55000			517000	106000	53000	107000	119000	21000	83000	401000
a	98000								10600	87400
b	-9000			21000	56000	12000		80000
c	5250			-5250
d	-19000	19000
e
f	-5300		5300
Total	124950	19000	5300	532750	162000	65000	107000	199000	31600	170400	401000