Cougar Plastics Company has been operating for three years. At December 31 of last year

Cougar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following:                                                                                    

Cash      $              23,000                  Accounts payable            $              15,000

Investments (short-term)                           3,300                    Accrued liabilities payable                           2,400

Accounts receivable                      3,900                    Notes payable (short-term)                       7,600

Inventory                           29,000                  Notes payable (long-term)                         47,000

Notes receivable (long-term)                    1,800                    Common stock                 10,200

Equipment                         43,000                  Additional paid-in capital                             91,800

Factory building                               96,000                  Retained earnings                          29,200

Intangibles                         3,200                                                     

During the current year, the company had the following summarized activities:

Purchased short-term investments for $8,100 cash.

Lent $6,600 to a supplier who signed a two-year note.

Purchased equipment that cost $23,000; paid $5,500 cash and signed a one-year note for the balance.

Hired a new president at the end of the year. The contract was for $81,000 per year plus options to purchase company stock at a set price based on company performance.

Issued an additional 2,700 shares of $0.50 par value common stock for $18,000 cash.

Borrowed $15,000 cash from a local bank, payable in three months.

Purchased a patent (an intangible asset) for $1,000 cash.

Built an addition to the factory for $20,000; paid $7,800 in cash and signed a three-year note for the balance.

Returned defective equipment to the manufacturer, receiving a cash refund of $1,800.

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East Hill Home Healthcare Services was organized by four friends who each invested $11,000 in the

East Hill Home Healthcare Services was organized by four friends who each invested $11,000 in the company and, in turn, was issued 8,500 shares of $1.00 par value stock. To date, they are the only stockholders. At the end of  last year, the accounting records reflected total assets of $734,000 ($62,000 cash; $502,000 land; $56,000 equipment; and $114,000 buildings), total liabilities of $224,000 (short-term notes payable of $114,000 and long-term notes payable of $110,000), and stockholders’ equity of $510,000 ($23,000 of common stock, $94,000 of additional paid-in capital, and $393,000 retained earnings). During the current year, the following summarized events occurred:

Sold 10,600 additional shares of stock to the original organizers for a total of $109,000 cash.

Purchased a building for $67,000, equipment for $17,000, and four acres of land for $16,000; paid $12,000 in cash and signed a note for the balance (due in 15 years). (Hint: Five different accounts are affected.)

Sold one acre of land acquired in (b) for $4,000 cash to another company.

Purchased short-term investments for $17,500 cash.

One stockholder reported to the company that 350 shares of his East Hill stock had been sold and transferred to another stockholder for $3,800 cash.

Lent one of the shareholders $5,100 for moving costs, receiving 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?


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