1. Wellplace Hospital provides you with the following financial statements for 20X2 and 20X1:
|
December 31
|
|
20X2
|
20X1
|
|
Cash
|
$ 168
|
$ 211
|
|
Temporary investments
|
126
|
34
|
|
Receivables-patients, net
|
1,011
|
893
|
|
Inventory
|
296
|
315
|
|
Prepaid expenses
|
25
|
29
|
|
Total current assets
|
1,626
|
1,482
|
|
Long-term investments
|
466
|
442
|
|
Plant assets, net
|
8,126
|
8,185
|
|
Other assets
|
167
|
88
|
|
Total
|
$10,385
|
$10,197
|
|
Current portion of long-term debt
|
$ 180
|
$ 180
|
|
Notes payable
|
125
|
75
|
|
Accounts payable
|
196
|
202
|
|
Accrued expenses payable
|
238
|
217
|
|
Payroll taxes withheld
|
81
|
63
|
|
Advances from third-party payers
|
75
|
55
|
|
Other
|
42
|
29
|
|
Total current liabilities
|
937
|
821
|
|
Long-term debt
|
1,718
|
1,865
|
|
Total liabilities
|
2,655
|
2,686
|
|
Net assets
|
7,730
|
7,511
|
|
Total
|
$10,385
|
$10,197
|
|
Year Ended 12/31
|
|
20X2
|
20X1
|
|
Gross patient services revenues
|
$ 8,830
|
$ 7,326
|
|
Deductions from patient services revenues
|
1,430
|
1,465
|
|
Net patient services revenues
|
7,400
|
5,861
|
|
Other operating revenues
|
505
|
407
|
|
Total operating revenues
|
7,905
|
6,268
|
|
Less operating expenses:
|
|
|
|
Nursing services
|
2,560
|
2,197
|
|
Other professional services
|
2,050
|
1,615
|
|
Administrative services
|
1,350
|
1,033
|
|
Other operating services
|
1,925
|
1,614
|
|
Total operating expenses
|
7,885
|
6,459
|
|
Operating income (loss)
|
20
|
(191)
|
|
Nonoperating revenues, net
|
224
|
176
|
|
Excess of revenues over expenses (loss) for the year
|
$ 244
|
$ (15)
|
The other operating services include expenses of $520 of depreciation, $110 of interest expense, and $790 of insurance expense.
Required:
(1) Develop a horizontal analysis of these statements.
(2) Convert the above financial statements to common size.
(3) Prepare a ratio analysis of 20X2 operating results.
(4) Prepare a ratio analysis of the December 31, 20X2 financial position.
2. The following is the preadjusted trial balance of Grandtown Hospital at December 31, 20X1, the end of the hospital's current fiscal year:
The following additional information is available:
|
Acct. No.
|
|
Dr.
|
Cr.
|
|
101
|
Cash
|
$ 37,500
|
|
|
102
|
Temporary investments
|
30,000
|
|
|
103
|
Accrued interest receivable
|
-0-
|
|
|
104
|
Accounts receivable
|
120,000
|
|
|
105
|
Allowance for uncollectible accounts
|
|
$ -0-
|
|
106
|
Inventory
|
14,000
|
|
|
107
|
Prepaid insurance
|
3,600
|
|
|
120
|
Land
|
25,000
|
|
|
130
|
Buildings
|
250,000
|
|
|
131
|
Accumulated depreciation-buildings
|
|
-0-
|
|
140
|
Equipment
|
140,000
|
|
|
141
|
Accumulated depreciation-equipment
|
|
-0-
|
|
201
|
Accounts payable
|
|
37,400
|
|
203
|
Accrued interest payable
|
|
-0-
|
|
204
|
Accrued salaries and wages payable
|
|
-0-
|
|
205
|
Deferred rental income
|
|
2,700
|
|
250
|
Bonds payable
|
|
150,000
|
|
301
|
Hospital net assets
|
|
395,700
|
|
302
|
Revenue and expense summary
|
|
-0-
|
|
401
|
Routine services revenue
|
|
171,200
|
|
402
|
Ancillary services revenue
|
|
110,300
|
|
403
|
Interest income
|
|
-0-
|
|
404
|
Rental income
|
|
-0-
|
|
406
|
Other operating revenues
|
|
23,500
|
|
501
|
Contractual adjustments
|
22,700
|
|
|
502
|
Charity care adjustments
|
31,100
|
|
|
601
|
Salaries and wages expense
|
155,600
|
|
|
602
|
Supplies expense
|
33,100
|
|
|
603
|
Utilities expense
|
14,900
|
|
|
604
|
Insurance expense
|
-0-
|
|
|
605
|
Repairs expense
|
6,400
|
|
|
607
|
Depreciation expense
|
-0-
|
|
|
608
|
Interest expense
|
4,500
|
|
|
609
|
Bad debt expense
|
-0-
|
|
|
610
|
Other expenses
|
2,400
|
|
|
|
Totals
|
$890,800
|
$890,800
|
1. The temporary investment consists of $30,000 (face value) of 8 percent bonds acquired by the hospital on November 1, 20X1. These bonds pay interest annually on November 1, commencing on November 1, 20X2.
2. Of the December 31, 20X1, accounts receivable, it is estimated that 14 percent will eventually prove uncollectible by reason of
(1) charity care, 7 percent; (2) contractual adjustments, 4 per- cent; and (3) bad debts, 3 percent.
3. A two-year insurance premium of $3,600 was paid in advance by the hospital on January 1, 20X1.
4. The hospital building, which was acquired on January 1, 20X1, has an estimated useful life of 50 years and a 20 percent salvage value.
5. The equipment, which was acquired on January 1, 20X1, has an estimated useful life of 12 years and a $20,000 salvage value.
6. On January 1, 20X1, the hospital issued $150,000 of 20-year, 6 percent bonds at face value. These bonds pay interest semiannu- ally on January 1 and July 1, commencing July 1, 20X1.
7. Unpaid salaries and wages at December 31, 20X1, amounted to $12,300.
8. The hospital received one year's rent of $2,700 in advance on June 1, 20X1.
Required:
(1) Prepare a worksheet to develop financial statements in the manner illustrated in table.
(2) Prepare, in good form, a complete set of financial statements for 20X1.
(3) Prepare, in general journal form, the necessary adjusting entries at December 31, 20X1, for the year then ended.
(4) Prepare, in general journal form, the necessary closing entries on December 31, 20X1, for the year then ended.