+61480015851
GSBS6385 - Financial Management and Decision Making in Healthcare
Download Solution
Order New Solution
Assignment Task
Objective
Apply relevant accounting concepts and principles in the preparation and analysis of financial statements.
Assessment
It is important that you provide workings for your answers, give adequate explanations to your answers, rather than general responses. In particular, and in answering the assignment questions, you need to be able to demonstrate you can:
Distinguish transactions used in the accounting process and distinguish the differences between the financial statements.
Identify and use the major accounting elements correctly according to how they have been listed or described as a part of transaction analysis and financial statement preparation.
Apply working knowledge of accounting principles and conventions to the accounting process correctly
Analyse and interpret financial statements and the information they present accurately and comprehensively.
Question 1
The following are the events associated with a healthcare service provider BettaBacks for the month of June:
|
1 June |
The owner contributed an additional $100,000 to the business |
|
1 June |
Paid the insurance in advance for the next 12 months $4,500 |
|
3 June |
Purchased new equipment for $35,000. $10,000 was paid in cash with the remainder on credit |
|
10 June |
Borrowed $100,000 from the bank |
|
11 June |
Invoiced a client for services provided $14,900. The invoice has not yet been paid |
|
20 June |
Provided $20,000 of services to a client for cash |
|
21 June |
The owner withdrew $2,000 for personal use to buy an ipad. |
|
23 June |
Received payment from services provided 11 June |
|
25 June |
Received $30,000 for services not yet performed. Services to be performed in July. |
|
30 June |
Received the electricity bill for the month of June for $2,900. Bill is to be paid on 15 July |
|
30 June |
Paid the wages to staff for the month of June $17,000 |
|
30 June |
Paid $14,000 to an account payable |
|
30 June |
Recorded the insurance used up for the month of June |
|
30 June |
Paid rent for the month of June $5,000 |
|
30 June |
Depreciation on medical equipment was estimated to be $200 and usage of supplies was estimated to be $500 for June |
|
30 June |
Received a letter of demand to pay $1500 in damages. Our legal team will dispute the claim. |
At 1 June, the cash balance was $64,000, Supplies (Medical) were $4,000, Equipment was $44,000 and Capital was $112,000
Required
- Complete a worksheet detailing the transactions for the month ending 30 June 2022. (Use a template similar to the one used in Activity 2.3 and adapt it for the purposes of BettaBacks). Calculate the ending balances, as well as profit/loss. Was the organisation profitable?
- Describe why the recording of transactions is necessary and how this information will be used in external decision making. Explain why a manager should understand the accounting cycle in performing their job.
Question 2
The following data relates to a manufacturer of pharmaceuticals (GetGood Pharmaceuticals Ltd.) The accounts are in no particular order and relate to items of revenue and expense for the financial year ended 30 June 2023 and assets, liabilities and equity as at 30 June 2023:
|
Accounts Payable |
12,000 |
|
Accounts Receivable |
3,000 |
|
Buildings (net) |
86,000 |
|
Share Capital |
50,000 |
|
Cash |
12,450 |
|
Cost of Goods Sold |
57,500 |
|
Depreciation Expense |
5,000 |
|
Dividends |
26,500 |
|
Electricity Expense |
1,260 |
|
Equipment (net) |
13,800 |
|
Insurance Expense |
6,000 |
|
Interest Expense |
6,500 |
|
Interest Payable |
4,200 |
|
Inventory |
12,700 |
|
Land |
40,000 |
|
Borrowings (due 2025) |
40,000 |
|
Prepaid Insurance |
1,500 |
|
Prepaid Rent |
1,200 |
|
Rent Expense |
1,500 |
|
Sales |
125,000 |
|
Unearned Revenue |
25,000 |
|
Wages Expense |
22,000 |
|
Wages Payable |
7,000 |
|
Provisions (approx. 50% is due to be paid in the next twelve months) |
20,000 |
|
Retained Earnings |
? |
Required
- Prepare a balance sheet (statement of financial position) which classifies assets and liabilities into current and non-current, as well as a profit and loss statement for the relevant period.
- Using an example, explain two ways a manager may manipulate earnings this year to overstate profit. What may a manager look at to determine a red-flag and discuss the impact on subsequent years in the financial position and performance of the organisation
- The state government has dictated to local health districts the rescue helicopters stationed at major hospitals are to be classified as assets of the local health district. The rescue helicopters were acquired by the state government with the local health district not responsible for staffing, maintaining or scheduling of rescues. The state government has provided guidance the rescue helicopters are gifted to the local health district, and with recording an asset the local health is to record an associated revenue.
Critically evaluate the accounting treatment of the rescue helicopters.
Question 3
The information above below relates to a private hospital Healthy Hospitals Pty Ltd for the financial year ended 30 June 2023. The cash balance at the beginning of the financial year was $14,100, the cash balance at the end of the year was $52,300.
|
Item |
Amount |
|
Amounts owing from customers |
$38,000 |
|
Borrowed money on a long term long from the bank |
$55,000 |
|
Cash paid to employees |
$82,000 |
|
Cash paid to suppliers |
$165,000 |
|
Cash received from services provided |
$301,500 |
|
Depreciation on equipment |
$18,000 |
|
Dividends paid to shareholders |
$10,000 |
|
Income taxes paid |
$24,900 |
|
Interest paid |
$4,500 |
|
Interest received |
$2,100 |
|
Issued shares for cash |
$50,000 |
|
Payment to purchase new furniture |
$62,000 |
|
Purchase of vehicles using lease finance |
$85,000 |
|
Redeemed debentures for cash |
$70,000 |
|
Sold equipment for cash |
$48,000 |
(a) Prepare a Statement of Cash Flows for the year ending 30 June 2023.
(b) Describe the role the cash flow statement and profit and loss statement play in determining the financial sustainability of the organisation.
(c) Profit for the year was $76,750. What is the most relevant cash flow to compare to profit for the period. Outline the concerns you have in comparing profit with cash flow.
This GSBS6385 - Accounting and Finance has been solved by our PhD Experts at My Uni Paper.