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Question

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:
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, which is due to be paid in 15 years.
c. 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.
d. Purchased supplies 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. d. Cash balance at the end of the month.

Answer 1

Cash balance at the end of the month is arrived at as follows:
a. Collected a total of $40,000
b. Purchased assets paid ($13,000) in cash
d. Purchased supplies for ($3,000) cash.
e. Sold one acre of land for $4,000 cash
f. Lent one of the shareholders ($5,000)
= $23,000

c. 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.
- This is irrelevant. When shares are transferred, the cash goes from the buyer to the seller, nothing goes to the co.

Answer 2

Are wanting to know what the cash balance is at the end of the month???

Answer 3

My profile is an Aries with Capricorn rising and Taurus moon....

Answer 4

I don't answer accounting questions from people who have a name like "sweetnsinful". But you do look cute in your pic.