Various Transactions for Lester's Home Healthcare Services
Not what you're looking for?
Lester's Home Healthcare Services (LHHS) was organized on January 1, 2005, 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 2005), the company had the following six events:
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 spreadsheet that follows and to use plus (+) for increases and minus (-) for decreases for each account. The first transaction is used as an example.
1. Collected a total of $40,000 from the organizers and, in turn, issued the shares of stock.
2. 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, which is due to be paid in 15 years.
3. One stockholder reported to the company that 500 shares of his Lester's stock had been sold and transferred to another stockholder for $5,000 cash.
4. Purchased supplies for $3,000 cash.
5. Sold one acre of land for $4,000 cash to another company.
6. Lent one of the shareholders $5,000 for moving costs, receiving a signed six-month note from the shareholder.
After the spreadsheet is done I need to answer these questions
1. Was Lester's Home Healthcare Services organized as a partnership or corporation? Explain the basis for your answer.
1. Did you include the transaction between the two stockholders?event c?in the spreadsheet? Why?
2. Based only on the completed spreadsheet, provide the following amounts (show computations):
3. Total assets at the end of the month.
4. Total liabilities at the end of the month.
5. Total stockholders' equity at the end of the month.
6. Cash balance at the end of the month.
7. Total current assets at the end of the month.
8. As of January 31, 2005, has the financing for LHHS'S investment in assets primarily come from liabilities or stockholders' equity?
Purchase this Solution
Solution Summary
The solution presents a "plus-minus' format to summarize January 2005 transactions for analysis. Using the format, the questions are answers with explanations to assist with understanding.
Solution Preview
Excel attached for the spreadsheet to summarize the transactions. The questions are included below and on the spreadsheet.
1. LHHS is a corporation because individuals bought ...
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Operations Management
This quiz tests a student's knowledge about Operations Management
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce