In: Accounting
Developing Financial Statements
All organizations, including those in the healthcare industry, need to make money to be profitable and survive. Financial statements, such as balance sheets, profit and loss statements, and cash flow statements, summarize an organization’s profitability and overall financial status. For this Assignment, you practice developing three key financial statements using data from the Sharpe Medical Center.
Sharpe Medical Center
Sharpe Medical Center is a large Midwestern acute care and ambulatory facility serving an urban city population.
Givens (in '000s): |
|
Inventory |
$4,000 |
Patient revenues (net of contractual allowance) |
$302,000 |
Gross plant, property, and equipment |
$375,000 |
Net accounts receivable |
$85,000 |
Ending balance, temporarily restricted net assets |
$6,000 |
Wages payable |
$6,600 |
Long-term debt |
$218,400 |
Supply expense |
$34,000 |
Net assets released from temporary restriction |
$7,000 |
Depreciation expense |
$44,000 |
General expense |
$95,000 |
Provision for bad debt expense |
$4,500 |
Cash and cash equivalents |
$18,000 |
Transfer to parent corporation |
($3,900) |
Beginning balance, unrestricted net assets |
$239,400 |
Accounts payable |
$11,000 |
Beginning balance, temporarily restricted net assets |
$13,000 |
Interest expense |
$6,000 |
Labor expense |
$123,000 |
Accumulated depreciation |
$22,000 |
Long-term investments |
$20,000 |
Ending balance, unrestricted net assets |
$238,000 |
To prepare for this Assignment:
Examine the data from Sharpe Medical Center. Reflect on how you will use this data to develop a Balance Sheet, Profit and Loss Statement, and Cash Flow Statement. Refer to the course text for additional guidance.
The Assignment:
Complete a Balance Sheet, Profit and Loss Statement (Statement of Operations), and Cash Flow Statement (Statement of Changes in Net Assets) using the Week 5 Financial Statement Excel Template located in the Learning Resources.
1
Sharp Medical Center |
|
Profit and Loss Statement (in '000s) |
|
For the Year Ended |
|
Revenues |
|
Patient revenues (net of contractual allowance) |
$ 302,000.00 |
Less; Expenses |
|
Supply expense |
$34,000 |
Depreciation expense |
$44,000 |
General expense |
$95,000 |
Interest expense |
$6,000 |
Labor expense |
$123,000 |
Total expense |
$302,000 |
Net income |
$ - |
___________________________
2
Sharp Medical Center |
|
Balance Sheet (in '000s) |
|
For the Year Ended |
|
Current assets |
|
Cash and cash equivalents |
$ 18,000.00 |
Net accounts receivable |
$ 85,000.00 |
Inventory |
$ 4,000.00 |
Total current assets |
$ 107,000.00 |
Gross plant, property, and equipment |
$ 375,000.00 |
(less accumulated depreciation) |
$ 22,000.00 |
Net plant, property & equipment |
$ 353,000.00 |
Long-term investments |
$ 20,000.00 |
Total assets |
$ 480,000.00 |
Current liabilities |
|
Accounts payable |
$11,000 |
Wages payable |
$ 6,600.00 |
Total current liabilities |
$ 17,600.00 |
Long-term debt |
$ 218,400.00 |
Total liabilities |
$ 236,000.00 |
Net assets |
|
Ending balance, unrestricted net assets |
$ 238,000.00 |
Ending balance, temporarily restricted net assets |
$ 6,000.00 |
Total net assets |
$ 244,000.00 |
Total liabilities and net assets |
$ 480,000.00 |
_______________________________________________
3
Sharp Medical Center |
|
Cash flow Statement (in '000s) |
|
For the Year Ended |
|
Cash flow from operating activities |
|
Net income |
$ - |
Adjustments; |
|
Depreciation expense |
$44,000 |
Transfer to parent corporation |
($3,900) |
Provision for bad debt expense |
$4,500 |
Net cash flows from operating |
$44,600 |
Cash flow from investing activities |
|
Net change temporarily restricted net assets |
$ 7,000.00 |
Net change unrestricted net assets |
$ 400.00 |
Net cash flows from investing activities |
$ 7,400.00 |
Cash flow from financing activities |
|
Long-term investments |
($20,000) |
Net cash flows from financing activities |
($20,000) |
Net cash flows from |
$32,000.00 |
Add; |
|
Cash and cash equivalents |
$ 18,000.00 |
Total cash |
$50,000.00 |