Question

In: Finance

Instructions: For this assignment, you will create a cash flow statement for Happy Healing Hospital for...

Instructions:

For this assignment, you will create a cash flow statement for Happy Healing Hospital for 2016.

The information for 2016 has been collected from various sources within the healthcare organization and is listed in the info below.  It is not nice and neat. The entries are not lined up very well and may be a little out of order for your report but the information that you need to create this statement is all listed. It is up to you to create the statement and make it presentable.

You will find the information for 2015 has already been entered in the spreadsheet as an example to go by.

To complete this assignment, please do the following:

  • add a column next to 2015 and label it 2016 for side-by- side comparison.
  • enter the information below in the appropriate cell.
  • create formulas to total each section as was done for 2015.
  • Happy Healing Hospital - Cash Flow Statement

    Reported Values

    Operating Activities

    2015 2016
    Cash received from patients and third party payors $19,915,566
    Cash paid to employees for salaries and benefits ($11,081,726)
    Cash paid to vendors for goods and services ($7,166,776)
    Other operating receipts, net $671,212
    Net cash from operating activities $2,338,276

    Capital and related financing activities

    Acquisition and construction of capital assets ($477,992)
    Proceeds from sale of capital assets $3,980
    Interest paid on long-term debt ($42,184)
    Payments on line of credit -
    Proceeds on long-term debt -
    Principal payments on long-term debt ($391,003)
    Net cash from capital and related financing activities ($907,199)

    Investing activities

    Investment and other nonoperating income $108,045
    Net cash from investing activities $108,045
    Net change in cash and cash equivalents $1,728,113
    Cash and cash equivalents, beginning of year $2,379,906
    Cash and cash equivalents, end of year $4,324,109

    Reconciliation of cash and cash equivalents to the balance sheets

    Cash and cash equivalents
    In current assets $5,166,428
    In noncurrent cash and investments $809,491
    Total cash and cash equivalents $5,975,919

    Reconciliation of operating loss to net cash from operating activities

    Operating income $861,828

    Adjustments to reconcile operating income to net cash from operating activities:

    Depreciation and amortization $1,883,051
    (Gain) loss on disposal of capital assets ($525)
    Provision for bad debt $1,281,107
    Changes in assets and liabilities
    Patient accounts receivable ($2,044,870)
    Estimated third-party settlements $1,199,971
    Supplies and other current assets $90,264
    Other assets ($7,698)
    Accounts payable and accrued expenses $2,077,036
    Other current liabilities $57,535
    Accrued salaries and related liabilities ($2,405,197)
    Other long-term liabilities ($25,000)

    Net cash flows from operating activities

    $2,967,502

2016

Operating income

$180,798

Acquisition and construction of capital assets

($401,572)

Proceeds from sale of capital assets

-   

Interest paid on long-term debt

($48,036)

Payments on line of credit

($150,000)

Proceeds on long-term debt

$125,000

Principal payments on long-term debt

($352,225)

Cash and cash equivalents

In current assets

$1,739,826

In noncurrent cash and investments

$640,080

Total cash and cash equivalents

$2,379,906

Depreciation and amortization

$1,243,393

(Gain) loss on disposal of capital assets

$246,456

Provision for bad debt

$1,402,017

Changes in assets and liabilities

Patient accounts receivable

($717,771)

Estimated third-party settlements

$300,318

Supplies and other current assets

($221,648)

Other assets

$7,760

Accounts payable and accrued expenses

($364,752)

Other current liabilities

$77,440

Accrued salaries and related liabilities

$186,109

Other long-term liabilities

($35,000)

Investment and other nonoperating income

($103,893)

Net cash from investing activities

($103,893)

Net change in cash and cash equivalents

$1,374,394

Cash and cash equivalents, beginning of year

$1,005,512

Cash received from patients and third party payors $20,363,530




Cash paid to employees for salaries and benefits

($11,349,910)

Cash paid to vendors for goods and services

($7,724,464)

Other operating receipts, net

$1,015,964

Solutions

Expert Solution

Happy Healing Hospital - Cash Flow Statement

Reported Values

Operating Activities

2015 2016
Cash received from patients and third party payors $19,915,566 $20,363,530
Cash paid to employees for salaries and benefits ($11,081,726) ($11,349,910)
Cash paid to vendors for goods and services ($7,166,776) ($7,724,464)
Other operating receipts, net $671,212 $1,015,964
Net cash from operating activities $2,338,276 $2,305,120

Capital and related financing activities

Acquisition and construction of capital assets ($477,992) ($401,572)
Proceeds from sale of capital assets $3,980 -
Interest paid on long-term debt ($42,184) ($48,036)
Payments on line of credit - ($150,000)
Proceeds on long-term debt - $125,000
Principal payments on long-term debt ($391,003) ($352,225)
Net cash from capital and related financing activities ($907,199) ($826,833)

Investing activities

Investment and other nonoperating income $108,045 ($103,893)
Net cash from investing activities $108,045 ($103,893)
Net change in cash and cash equivalents $1,728,113 $1,374,394
Cash and cash equivalents, beginning of year $2,379,906 $1,005,512
Cash and cash equivalents, end of year $4,324,109 $2,379,906

Reconciliation of cash and cash equivalents to the balance sheets

Cash and cash equivalents
In current assets $5,166,428 $1,739,826
In noncurrent cash and investments $809,491 $640,080
Total cash and cash equivalents $5,975,919 $2,379,906

Reconciliation of operating loss to net cash from operating activities

Operating income $861,828 $180,798

Adjustments to reconcile operating income to net cash from operating activities:

Depreciation and amortization $1,883,051 $1,243,393
(Gain) loss on disposal of capital assets ($525) $246,456
Provision for bad debt $1,281,107 $1,402,017
Changes in assets and liabilities
Patient accounts receivable ($2,044,870) ($717,771)
Estimated third-party settlements $1,199,971 $300,318
Supplies and other current assets $90,264 ($221,648)
Other assets ($7,698) $7,760
Accounts payable and accrued expenses $2,077,036 ($364,752)
Other current liabilities $57,535 $77,440
Accrued salaries and related liabilities ($2,405,197) $186,109
Other long-term liabilities ($25,000) ($35,000)

Net cash flows from operating activities

$2,967,502

Net cash flows from operating activities for 2016=$4,479,215


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