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27.     (Financial statement analysis of a hospital)

Following is a trial balance (with 000 omitted for simplification) showing the accounts of Beta Hospital at December 31, 2008. Using the information from the trial balance, analyze Beta's financial statements by answering the following questions. Show all calculations.
          a.     What is the current ratio?
          b.     What is the net patient service revenue?
          c.     What is the number of days of revenue in net patient accounts receivable?
          d.     How much is the excess of revenues over expenses?
          e.     What is the earnings margin?
          f.     What is the long-term debt-to-equity ratio at year-end?
          g.     What is the interest coverage (times interest earned)?

 

 

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 assets, January 1, 2008

 

17,300

 

 

 

Patient service revenues (gross)

 

50,000

 

 

 

Contractual adjustments

12,000

 

 

 

Charity care

2,000

 

 

 

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

$128,000

$128,000

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