Important: You must show all calculations and explain how you got all your answers. For example, suppose a question asks what the profit will be in a particular month and you put “$50,000”. Even if this is correct you will receive no marks if you do not show how you got the answer.
There is no need for footnotes or references unless quote from a reference. It is essential that the work is your own.
Please do NOT include the question as part of your assignment. It is not necessary and all it does is increase your turnitin similarity index. Just put your answers in your assignment response.
Question 1(15 marks)
Items from the Melbourne Hospital’s balance sheet and revenue and expense (income) statement for the 2016/17 financial year (ending 30 June) were accidentally listed in alphabetical order as follows:
Balance sheet and profit and loss information
Agency costs (Nursing) 12,973
Bank overdraft 73
Car park revenue 10,519
Cash and Cash Equivalents 25,126
Contributions received from the Department of Health 7,527
Current Payables 53,792
Current Receivables 33,994
Depreciation and Amortisation 61,360
Dividend income 38,798
Donations and Bequests 11,939
Equity 525,402
Finance Costs 1,545
Government grants received 713,203
Insurance expense 11,832
Interest income 5,207
Inventories 7,210
Long term Investments 44,478
Long term Loans 22,450
Long-term leave entitlements payable 17,187
Maintenance and Security expenses 23,244
Motor vehicles 12,270
Patient and Resident fees received 31,620
Power and utilities expense 1,301
Property, Plant & Equipment 639,912
Rental/Property income 19,028
Revenue from Private Health Insurance 44,398
Revenue from private practice 31,071
Short term Loans 1,093
Short-term Employee Entitlements payable 142,993
Superannuation 89,483
Supplies & Consumables expense 179,819
Transport Costs 728
Wages and Salaries 549,489
- Prepare a balance sheet. Make sure to distinguish between current and non-current assets and liabilities. All figures are in thousands of dollars. (3 marks)
- Prepare an income (profit and loss) statement for this hospital. (3 marks)
- What are the major debts of the hospital and what are its major liquid assets? Do you think that this hospital is in a good position to pay its short-term debts? Explain your answer. (3 marks)
The Hospital’s cashflow information for the 2016/17 financial year was also put in alphabetical order as follows:
Cash flow information
Cash at beginning of year 9,879
Cash at the end of year 17,134
Donations and Bequests Received 11,939
Employee Expenses Paid 553,246
Finance Costs paid 1,545
GST received 25,867
Non Salary Labour Costs paid 12,560
Operating Grants from Government 720,497
Other Receipts 52,946
Patient and Resident Fees Received 24,027
Payments for Supplies and Consumables 321,412
Private Practice Fees Received 41,590
Proceeds from Sale of Investments 332
Proceeds from Sale of Non-Financial Assets 335
Purchase of Property, Plant and Equipment 24,326
Repayment of Borrowings 1,026
Revenue received from private health insurance 43,837
- Prepare a cashflow statement showing operating, investing and financing cashflows for the 2016/17 financial year. (3 marks)
- What net cash inflow or net cash outflow did the hospital report for the 2016/17 financial year? What profit or loss did the hospital report during the financial year? Briefly explain why these figures are different. (3 marks)
Question 2 (15 marks)
The following transactions were taken for the month of June 2018 for the Bendigo General Practice. The opening cash balance in the practice’s bank account on 1 June 2018 was $12,912.
The following cash transactions occurred during June 2018.
1 June: Paid yearly insurance of $600
3 June: paid salary of $900
4 June: paid $555 for office supplies
7 June: Received payment from patients of $12,000
12 June: paid $1,307 for office supplies
15 June: paid $1416 for internet connection
17 June: Received $3,535 from patients
19 June: paid $1,400 phone bill
20 June: received $11,788 from patients
23 June: paid $900 for salaries
24 June: received $1,500 from patients
26 June: paid $500 for rent
29 June: paid $498 for computer repairs
30 June: paid $3,600 for salaries
- Prepare a cash flow statement for the practice for June (2 marks)
- Prepare a profit and loss statement for June under the accrual basis. (2 marks)
The following additional information is necessary for you to do this:
Revenues:
- The $12,000 received from patients on June 7 was an advance payment for work to be performed equally during April, May, and June.
- The $11,788 deposit on June 20 was for services delivered during April and May.
- During June, services valued at $5,000 were delivered and billed, but not yet received.
Expenses:
- Salaries — The $900 payment on June 3 consisted of $650 which related to May.
- An additional $1,000 was salaries payable for work done in June, but not yet paid.
- Rent — The amount paid was for month of June.
- Internet connection — The $1,416 payment on June 15 included $700 for usage in June.
- Office supplies — $600 of office supplies were actually used during June.
- Explain why the profit and loss figures and the cashflow figures are different. To do this you must show how the difference arose – eg ‘the difference between the cash flow and profit and loss figures was $5,100, of this, $600 was because…” (6 marks)
- Suppose you were interested in buying this practice. What figures would you consider to be the most useful? What other information would you want to consider? Explain your answer. (5 marks)
