1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alecsey [184]
3 years ago
5

East Hill Home Healthcare Services was organized five years ago by four friends who each invested $10,000 in the company and, in

turn, were issued in total 8,000 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 $700,000 ($50,000 cash; $500,000 land; $50,000 equipment; and $100,000 buildings), total liabilities of $200,000 (short-term notes payable $100,000 and long-term notes payable $100,000), and stockholders’ equity of $500,000 ($20,000 common stock; $80,000 additional paid-in capital; and $400,000 retained earnings). During the current year, the following summarized events occurred:
a. Sold 9,000 additional shares of stock to the original organizers for a total of $90,000 cash.
b. Purchased a building for $60,000, equipment for $15,000, and four acres of land for $14,000; 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 $3,500 cash to another company.
d. Purchased short-term investments for $18,000 cash.
e. One stockholder reported to the company that 300 shares of his East Hill stock had been sold and transferred to another stockholder for $3,000 cash.
f. Lent one of the shareholders $5,000 for moving costs and received 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 Hill 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.
4. Based only on the completed tabulation, provide the following amounts:
5. Compute the current ratio for the current year
Business
1 answer:
kotegsom [21]3 years ago
8 0

Answer:

1. Was East Hill Home Healthcare Services organized as a sole proprietorship, a partnership, or a corporation?

East Hill Home Healthcare Services should be considered a closed corporation since there is a small number of stockholders and its shares are not traded in an open trade market.

2. During the current year, the records of the company were inadequate. You were asked to prepare the summary of the preceding transactions.

Since there is not enough room here, I used an excel spreadsheet.        

4. What amounts do you need? If some amount is missing, look at the attached PDF.

total assets = $870,000

total liabilities = $280,000

total equity = $590,000

current assets = $134,500

current liabilities = $100,000

5. Compute the current ratio for the current year

current ratio = current assets / current liabilities = $134,500 / $100,000 = 1.345

     

Download pdf
You might be interested in
Andrea works as an accountant at a law firm. Her annual gross pay is $48,000. Her deductions include mortgage interest and healt
Oksana_A [137]
Andrea's asset: $48,000
Assets is cash that she owns. Other assets include: property, equipment, furniture - which are all costs that she owns.

Deductions refers to her liabilities- Andrea's liabilities/ $7,500
which costs that she owes to companies, billing and Not that she owns. Such as: mortgage, bills, bank amount loans, expenses etc

Here is what Andrea as an accountant needs to do to find the annual gross: (steps are in order)

1) she lists all of the assets costs & total the assets
As for andrea she added all her assets costs which is $48,000

2) she then lists all the liabilities costs & totals the liabilities costs
Her liabilities costs which is $7,500

3) the last step- she must subtract the assets total & liabilities total

Ex. (Assets) $48,000 - (liabilities) $7,500 = 40,500

The answer is $ 40,500 is her gross pay.

Now you are probably thinking how can that be the answer?!?

An accountant always checks :)

Here is Andreas checking process in order..

1) the answer 40,500 is her gross pay which in accounting terms it's her owner's equity because it is her amount of cash that she owns not giving it away. Think of it as a safe that her storages the money in.

2) in order to determine the total liabilities & owner's equity she must add the total liabilities + the owner's equity that we found.

Ex (total liabilities) $7,500 + $40,500 = $48,000!!
That shows that our answer is correct we retraced our steps like an accountant and found that our answer equals (in accounting terms; balances) the total assets costs.

Here is how the balance sheets looks like: Andreas balance sheet

Assets Liabilities
Cash cost Bank loan costs
Furniture cost Mortgage costs
Property cost Health Costs
Expense costs
Assets total: Liabilities total:
$48,000 $ 7,500

Owners equity (Andrea's safe) $40,500 by
(Assets - liabilities)

Total liabilities & owner's equity (total liabilities + OE (owners equity for short) = $48,000

In accounting if your total assets which is for Andrea is $48,000 equals total liabilities & OE is $48,000 then your answer is correct. In accounting assets total Must equal total liabilities & OE

Hope this helps :)
5 0
4 years ago
Ben is choosing between two savings accounts. Both accounts pay 3% interest. Account X pays compound interest. Account Y pays si
dybincka [34]

the interest rate is 3%

Ben should choose account X because, since it uses compound interest, it would pay interest on interest. Simple interest only pays on the original balance.

so your answer will be B it would pay interest on interest

4 0
4 years ago
Skysong, Inc. reported net income of $194,500 for 2020. Skysong also reported depreciation expense of $47,500 and a loss of $6,2
Elza [17]

Answer:

Net cashflow from operating activities =$271,400

Explanation:

<em>The cash flow statement is a financial statement that provides information about the sources and the usage of cash during a particular accounting period usually a year.</em>

It provides the cash inflow and outflows under three (3 ) categories of activities operating investing, financing.

The net operating activities section of the  cash flow is prepared below:

                                                                            $  

Net income                                                      194,500

Add Depreciation expense                             47,500

Add Loss on disposal                                       6,200

Add Decrease in account receivable             18,200

Add Increase in accounts payable                <u>  5,000</u>

Net cashflow from operating activities      <u>271,400  </u>

8 0
3 years ago
The current five year euro yen rate is 6% per annum (compounded annually). the five year eurodollar rate is 8.5%. what is the im
Arturiano [62]
<span>The implied forward premium or discount of the yen (over the current spot rate) for a five year forward contract would be 12.36 percent premium.</span>
3 0
3 years ago
In one of his weekly broadcasts, the Federal Reserve Chairman remarked that inflation had begun to tick upward. However, unemplo
VLD [36.1K]

Answer:

D) Monetary, fiscal

Explanation:

The Fed's dual mandate is to first promote a strong economy, but at the same time it must promote maximum employment, stable prices and moderate long term interest rates.

Monetary policy is carried out by the Fed through open market operations where it purchases or sells US securities, decreasing or increasing interest rates, and increasing or decreasing the money supply.

But if the interest rates are near 0, then the actions of the Fed are very limited regarding an expansionary monetary supply that would boost the economy and lower unemployment. There is basically no more room for lowering the interest rates.

So that means that the government must modify its fiscal policy to try to boost the economy. The government can either by increase spending, decrease taxes or a mixture of both. In this particular case, the Chairman of the Fed favors lowering decreasing taxes.

3 0
3 years ago
Other questions:
  • Typical housing lease may require a tenant to
    14·1 answer
  • Which of the following is the term for a special tax placed on foreign goods sold in
    12·1 answer
  • ________ is characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single perso
    5·1 answer
  • When applied to project management, the resource management knowledge area typically involves which of the following processes?
    5·1 answer
  • Allyson Cooke is a union member and an employee of a company that manufactures surgical equipment. She believes she has a grieva
    5·1 answer
  • A company purchased new equipment for $45,000. The company paid cash for the equipment. Other costs associated with the equipmen
    12·1 answer
  • Yoxyju128 Corporation has a cash balance of $11,100 on May 1. The company must maintain a minimum cash balance of $9,000. During
    6·1 answer
  • What is the value of ln(-1)<br>​
    9·1 answer
  • When your suppliers increase the prices of your inputs, they increase your _____, and this will shift your supply curve to _____
    8·1 answer
  • ACTIVITY 3 TOTAL:86 3.1 Distinguish between BEE and BBBEE.<br>​
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!