Florida Hospital Apopka, a not-for profit organization, began 2018 with the following account balances on January...
Florida Hospital Apopka, a not-for profit organization, began 2018 with the following account balances on January 1:
|
Cash |
$70,000 |
|
Accounts receivable |
245,000 |
|
Allowance for doubtful accounts |
18,000 |
|
Supplies inventory |
24,000 |
|
Property and Equipment |
1,500,000 |
|
Accumulated depreciation |
300,000 |
|
Accounts payable |
21,000 |
|
Notes payable (short-term bank loans) |
500,000 |
|
Net assets |
1,000,000 |
During 2018, the accounting clerk recorded the following transactions (Florida Hospital Apopka’s year end is December 31):
|
Transaction Number |
Event |
Amount |
|
1. |
Billed patients for services rendered |
$1,700,000 |
|
2. |
Purchased medical supplies on credit |
12,000 |
|
3. |
Employee salaries earned during 2018 |
712,000 |
|
4. |
Employee salaries paid during 2018 |
683,000 |
|
5. |
Annual depreciation on Property and Equipment |
150,000 |
|
6. |
Received a bank loan (short-term) |
750,000 |
|
7. |
Cash collections on patient billings |
1,124,000 |
|
8. |
Estimated bad debts for 2018 billings |
44,000 |
|
9. |
Made payment on bank loan |
575,000 |
|
10. |
Used medical supplies inpatient care |
10,000 |
a. Prepare a properly formatted 2018 balance sheet and income statement for the hospital using the beginning account balances and incorporating the effects of each transaction.
b. What is Florida Hospital Apopka’s net working capital for 2018?
c. What is Florida Hospital Apopka’s debt ratio?
d. How does Florida Hospital Apopka’s debt ratio compare with the debt ratio for Sunnyvale (textbook, Exhibit 4.1)?
Homework Answers
| a) | INCOME STATEMENT | ||
| Service revenue | 1700000 | ||
| Operating expenses: | |||
| Salaries expense | 712000 | ||
| Supplies expense | 10000 | ||
| Depreciation expense-PPE | 150000 | ||
| Bad debts | 44000 | 916000 | |
| Net income | 784000 | ||
| BALANCE SHEET | |||
| Current Assets: | |||
| Cash (70000-683000+750000+1124000-575000) | 686000 | ||
| Accounts receivables (245000+1700000-1124000) | 821000 | ||
| Allowance for doubtful accounts (18000+44000) | -62000 | ||
| Medical supplies (24000+12000-10000) | 26000 | 1471000 | |
| Non-Current Assets: | |||
| Property and equipment | 1500000 | ||
| Accumulated depreciation (300000+150000) | 450000 | 1050000 | |
| Total assets | 2521000 | ||
| Current liabilities: | |||
| Accounts payable (21000+12000) | 33000 | ||
| Salaries payable (712000-683000) | 29000 | ||
| Notes payable (500000+750000-575000) | 675000 | 737000 | |
| Equity (1000000+784000) | 1784000 | ||
| Total liabilities & Equity | 2521000 | ||
| b) | Net working capital = 1471000-737000 = | 734000 | |
| c) | Debt ratio = 737000/2521000 = | 29.23% | |
| d) | Debt ratio of Sunnyvale is required to answer this | ||
| part. | |||
Add Answer to:
Florida Hospital Apopka, a not-for profit organization, began
2018 with the following account balances on January...
Florida Hospital Apopka, a not-for profit organization, began 2018 with the following account balances on January...
Florida Hospital Apopka, a not-for profit organization, began 2018 with the following account balances on January 1: Cash Accounts receivable Allowance for doubtful accounts Supplies inventory Property and Equipment Accumulated depreciation Accounts payable Notes payable (short-term bank loans) Net assets $70,000 245,000 18,000 24,000 1,500,000 300,000 21,000 500,000 1,000,000 During 2018, the accounting clerk recorded the following transactions (Florida Hospital Apopka's year end is December 31): Transaction Number Event Amount Billed patients for services rendered $1,700,000 12,000 712,000 683,000 150,000...
Florida Hospital Apopka, a not-for profit organization, began 2018 with the following account balances on January...
Florida Hospital Apopka, a not-for profit organization, began
2018 with the following account balances on January 1:
Cash
$70,000
Accounts receivable
245,000
Allowance for doubtful accounts
18,000
Supplies inventory
24,000
Property and Equipment
1,500,000
Accumulated depreciation
300,000
Accounts payable
21,000
Notes payable (short-term bank loans)
500,000
Net assets
1,000,000
During 2018, the accounting clerk recorded the following
transactions (Florida Hospital Apopka’s year end is December
31):
Transaction Number
Event
Amount
1.
Billed patients for services rendered
$1,700,000
2.
Purchased medical...
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Florida Hospital Apopka, a not-for profit organization, began
2018 with the following account balances on January 1:
Cash
$70,000
Accounts receivable
245,000
Allowance for doubtful accounts
18,000
Supplies inventory
24,000
Property and Equipment
1,500,000
Accumulated depreciation
300,000
Accounts payable
21,000
Notes payable (short-term bank loans)
500,000
Net assets
1,000,000
During 2018, the accounting clerk recorded the following
transactions (Florida Hospital Apopka’s year end is December
31):
Transaction Number
Event
Amount
1.
Billed patients for services rendered
$1,700,000
2.
Purchased medical...
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