Question

 

HCM 213

Q1. Balance sheet. The following are account balances as of September 30, 2020, for Ray

Hospital. Prepare a balance sheet at September 30, 2020. (Hint net assets will also need

to be calculated.) Also Find out the Current Ratio (1 Mark) and Net Working Capital (1 Mark)

Givens

Gross plant, property, and equipment $70,000,000

Accrued expenses                                           $6,000,000

Cash                                                                $8,000,000

Net accounts receivable                                $15,500,000

                                   

Accounts payable                                           $7,000,000

Long-term debt                                              $45,000,000

Supplies                                                          $3,000,000

Accumulated depreciation                           $5,000,000

Answer 1

Ans: Balance Sheet

Assets	Amount	Liabilities	Amount
Gross Plant property and Equipment	70,000,000	Long term Debt	45,000,000
less: Accumulated Depreciation	(5,000,000)	Accounts payable	7,000,000
Net Plant Property	65,000,000	Accrued Expenses	6,000,000
Supplies	3,000,000
Cash	8,000,000	Stockholder Equity {Balancing Figure}	33,500,000
Accounts receivable	15,500,000
Total Assets	91,500,000	Total Liabilities	91,500,000

Total Assets= Net plant property+ Supplies + Cash + accounts Receivable

Current ratio= Current Assets/Current Liabilities

Current Assets= Cash+ Accounts receivables+ supplies

=> 8,000,000+ 15,500,000+ 3,000,000

=> 26,500,000

Current Liabilities= Accounts payable+ accrued Expenses

=> 7,000,000+ 6,000,000

=> 13,000,000

Ratio= 26,500,000/13,000,000

=> 2.04:1

Net Working Capital= Current Assets- current Liabilities

=> 26,500,000-13,000,000

=> $13,500,000