Question

The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below.

Tampa Clinic

Income Statement

Year Ended December 31, 2018

Operating Revenues:

Patient service revenue                                    $524,630

Less provision for bad debts                              (27,630)

   Net patient service revenue                           $497,000

Other revenue                                                     10,000

Net operating revenues                                    $507,000

Expenses:

Salaries and benefits                                         $231,950

Supplies                                                               76,050

Insurance                                                             16,700

Depreciation                                                          8,000

Interest                                                                41,000

Total expenses                                                 $373,700

Operating income                                            $133,300

Nonoperating income:

Investment income                                          $    2,700

Net income                                                      $136,000

Tampa Clinic

Balance Sheet

December 31, 2018

	2018	2017
Cash and cash equivalents	$55,000	$33,000
Net patient accounts receivable	20,000	30,000
Inventories	20,000	11,000
Total current assets	$95,000	$74,000
Property and Equipment	290,000	70,000
Less: Accumulated depreciation	(14,000)	(6,000)
Net property and equipment	276,000	64,000
Long-term investments	27,000	0
Total assets	$398,000	$138,000
Accounts payable	$28,000	$12,000
Accrued expenses	6,000	8,000
Total current liabilities	34,000	20,000
Long-term debt	130,000	20,000
Total Liabilities	$164,000	$40,000
Net Assets	234,000	98,000
Total liabilities and equity	$398,000	$138,000

Additional information: The organization did not sell any fixed assets in 2018

a. Prepare a properly formatted statement of cash flows for 2018 using the indirect method. See Exhibit 4.6.

b. How does Tampa Clinic’s statement of cash flows compare with Sunnyvale’s statement? See textbook, Exhibit 4.6.

Answer 1

a)	STATEMENT OF CASH FLOWS
	Cash flows from operating activities:
	Net income		136000
	Adjustments to reconcile net income to net cash profived by operations:
	Depreciation expense	8000
	Decrease in accounts receivable = 30000-20000 =	10000
	Increase in inventory = 20000-11000 =	-9000
	Decrease in income accruals = 8000-6000 =	-2000
	Increase in accounts payable = 28000-12000 =	16000	23000
	Net cash provided by operating activities		159000
	Cash flows from investing activities:
	Purchase of long term investments	-27000
	Purchase of plant and equipment (290000-70000)	-220000
	Net cash used in investing activities		-247000
	Cash flows from financing activities:
	Cash from long term debt (130000-20000)	110000
	Net cash used in financing activities		110000
	Net increase (decrease) in cash		22000
	Cash balance at beginning of year		33000
	Cash balance at end of year		55000
b)	Exhibit of Sunnvale not uploaded.