Following is a trial balance (in thousands) showing the accounts of Beta Hospital at December 31, 2019. Using the information from the trial balance, answer the following questions. Show the calculations used.
Debits | Credits | |
Cash | $5,000 | |
Patient accounts receivable | 8,000 | |
Allowance for bad debts | $1,000 | |
Food and medicines inventory | 2,000 | |
Buildings | 40,000 | |
Accumulated depreciation, buildings | 8,000 | |
Equipment | 20,000 | |
Accumulated depreciation, equipment | 10,000 | |
Land | 5,000 | |
Accounts payable | 6,000 | |
Accrued interest payable | 200 | |
Current portion of bonds payable | 1,500 | |
Long-term bonds payable | 34,000 | |
Net position, January 1, 2019 | 17,300 | |
Patient service revenues (net) | 36,000 | |
Patient care expense | 20,000 | |
Dietary expense | 2,000 | |
General and administrative expense | 6,000 | |
Bad debts expense | 1,000 | |
Depreciation, buildings and equipment | 4,000 | |
Interest expense | 1,000 | |
Totals | $114,000 | $114,000 |
Requirement: | Formula | Result |
Days cash on hand | cash*365/Revenues | 5000*365/36000 = 50.70 days |
Days in Net Patient AR | Net AR*365/Revenues | 7000*365/36000 = 70.97 days |
Excess of revenues over expenses | Total revenues - Total expenses | 36000 - (20000+2000+6000+1000+4000+1000)=$2000 |
Operating Margin | Operating Income/Total Revenues | 2000/36000 = 5.56% |
Long term debt to Equity ratio | LTD / EQUITY | 34000/(17300+2000) = 1.76 |
Interest coverage | Interest paid / (Total revenues - Direct expenses) | 1000/(36000-(20000+2000)) = 0.07 |
Following is a trial balance (in thousands) showing the accounts of Beta Hospital at December 31,...
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