Management For Clinicians - Profit Or Loss Of Adelaide Hospital - Financial Accounting Assignment Help

Financial Accounting Assignment Help

The Adelaide Hospital provides a range of health care services and the following transactions took place between March and June:

? March 1 – paid rent in advance for the months of March, April, May and June - $16,000

? March 5 - Patients receive health care services of $60,000

? March 10 – Patients receive health care services of $250,000 on terms of net 30 days.

? March 15 - Patients pay $60,000 for health care services received on March 5.

? March 30 - hospital pays $50,000 for salaries for work done in March

? April 1 -The hospital purchases drugs for $160,000 on terms of net 30 days. In April the hospital uses $35,000 worth of drugs. In May $65,000 of drugs are used and in June $60,000 of drugs are used.

1. Calculate this Hospital's profit or loss for each of the months of March, April and May on both a cash accounting and accrual accounting basis. Make sure you show your calculations. You need to do a separate profit and loss statement for each month. Explain why these calculations are different.
2. What month was the most profitable for the hospital? Explain your answer. If the hospital had $45,000 in its bank account on March 1, how much would it have in the bank on 30 June?
3. Calculate the Hospital’s profit or loss for the four months ending June on both a cash accounting and accrual accounting basis. If you get the same answer for both methods explain why this is so. If you get a different answer for the cash and accrual methods explain why this happened.
4. As a manager of a healthcare facility what financial figures would you find the most useful – those done on a cash basis or those done on an accrual basis? Explain your answer.

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