The following transactions occurred during the year. Record these transactions.
A. HHL took out a long-term loan for $3 million.
B.HHL purchased $1 million in inventory with cash.
C.HHL purchased equipment that cost $150,000 on account. The equipment is expected to last 15 years and has no salvage value.
D.$540,865,000 (net of allowances and charity care) was billed for patient services. The hospital estimates that 5% of these bills will be bad debt.
E.$875,000 of inventory was used.
F.Donations of $400,000 were received in cash.
G.HHL pays in cash for a 2-year malpractice insurance premium at a cost of $5 million. One-half of the premium is for next year, and the other is for the following year.
H.HHL pays $12,560,000 in accounts payable.
I.HHL workers earned $259 million in wages for the year. The hospital paid out $282 million in cash. It also paid out $60 million in benefits, all in cash.
J.The equipment purchased in transaction c was paid for in cash.
K.$370,500,000 from bills sent to patients was received in cash.
L.HHL collected $25 million in outstanding patient bills in cash.
M.The board is concerned that too much debt outstanding is bad for the organization. The board chooses to accelerate their debt payments for the year. HHL paid out $51 million in long-term debt principal and $3 million of interest in cash.
N.Depreciation for the year was recorded?$23 million for existing fixed assets. Also, calculate the new depreciation necessary for the new equipment purchased this year, assuming straight-line depreciation.
O.The contract with the IT company chosen is signed. The initial contract cost is paid, as well as the first year payment.
Based on the answers provided can we calculate
Consolidated Statements of Financial Position (In Thousands) 2019 2018 Assets urrent assets: Cash and cash equivalents 341,587) $41,443 hort-term investments 70,779 70,779 ccounts receivable: Patient care, less allowance for uncollectibles 2012 -$31,085; 2011 -$39,048) 568,971 56,811 Inventory 6,257 Other-ne 6,416 6,416 310,836 81,581 Other current assets 12,439 12.439 Assets limited as to use -current portion (20,859) 1,276 Total current assets 302,416 195.296 Assets limited as to use : Jonor restricted 6,587 6,587 westments held by captive insurance companies 47,099 47.099 Deferred employee compensation lan assets 5,396 5 ,396 59,082 59,082 Less assets limited as to use - current portion (1,276) 1,276 Assets limited as to use -noncurrent 57,806 57,806 roperty, buildings and equipment - 209,641 186,481 ivestments in real estate -net 2,518 2,518 Other noncurrent assets 2,470 2,470 Total assets 574,851 $444,571 Liabilities and net assets Current liabilities: Current portion of long-term debt 2,804 $2,804 ccounts payable and accrued expenses 19,629 32,189 Accrued salaries and related iabilities (310,410) 31,590 Due to affiliates, net 1,502 1.927 rofessional insurance liabilities - current 6,738 6,738 Other current liabilities 556,399 15,534 Total current liabilities 276,662 Long-term debt, less current portion 250 51, 250 Accrued pension liability 29,183 29,183 Deferred employee compensation plan liabilities 5,396 5,396 Professional insurance liabilities - noncurrent 112,686 1 17,686 Other noncurrent liabilities 55,462 55,462 otal liabilities 479,639 849,759 Net assets: ithout donor restrictions 36,509 36, 109 With donor restrictions 8,703 8,703 Total net assets 95,212 94,812 Total liabilities and net assets 574,851 $444,571 consolidated Statements of Operations Revenue, gains and other support 2019 2018 Patient service revenue 541,301 Other revenue 100 26 656 Net assets released from estrictions 1,562 otal revenue, gains and other support 400 579,519 Operating expenses Salaries and wages 226,400 Employee benefits 59,15 supplies and other expenses 66,35 iterest and amortization of deferred financing fees 3,093 Depreciation and amortization 23,137 Total operating expenses 78,140 Gain(loss) from operations 400 1,379 Profession liability insurance program premium revision Excess (deficiency) of revenue over xpenses 400 1,379 Other changes in net assets without donor restrictions Change in unrealized gains and losses on investments - other than trading secur 4,036 Net assets released from estrictions for purchases o property, buildings and equipment 527 Change in pension liability to be recognized in future periods 12,231 Increase(decrease) in net assets without donor restrictions 400 18,173 Consolidated Statement c Year Ended December 31 2019 2018 (In Thousand Operating activities Change in net assets 400 17,991 Adjustments to reconcile change in et assets to net cash provided by operating activities n and amortization (23,010) 23,137 mortization of deferred financing 108 Net change in unrealized gains and osses on marketable securities 4,036) oss on other-than-temporary Impairment of investments in captive insurance companies Changes in operating assets and abilities: Patient care accounts receivable, et (512,160) (263 ) Other assets 22.010 1,568) Accounts payable and accrued xpenses 12,560) 2,099 Accrued salaries and related liabiliti (342,000) 3,681 ue to affiliates, net 1,061) Accrued pension liability 17,085 Professional insurance liabilities 9,876 Other liabilities 14,405 et cash provided by operating activities (867,320) 47.284 Investing activities Acquisitions of property, buildings and equipment, net (150) (8,734) Purchases) sales of investments, et (18,705) Jet decrease in investments in real estate 357 Net (increase) decrease in assets mited as to use (5,537) Net cash used in investing activities (150) (32,619) Financing activities ssuance of long-term debt 3,000 Principal repayments on long-term debt (54,000) (14,020) Net cash used in financing activities (51,000) (14,020) let cange in cash and cash quivalents (383,030) 64 ash and cash equivalents at beginning of year 41,443 10.798 Cash and cash equivalents at end of rear (341,587) 41,443 Supplemental disclosure of non cash nvesting and financing activities issets acquired under capitalized ase obligations 2,500Consolidated Statements of Financial Position (In Thousands) 2018 2017 Assets Current assets: Cash and cash equivalents 41,443 40, 798 short-term investments 70,779 48 038 Accounts receivable: Patient care, less allowance for uncollectibles 2012 -$31,085; 2011 - $39,048) 6 ,132 4,662 181,581 159,219 Other current as 12,439 12,308 Assets limited as to use - urrent portion 1,276 5,628 otal current assets 95,296 177,15 ssets limited as to use onor restricted 6.587 nvestments held by captive insurance companies 47,099 40,023 referred employee compensation plan assets 5,396 3,894 59,082 50,504 ess assets limited as to use -current portion -1,276 5,628 Assets limited as to use - noncurrent 57,806 44,876 Property, buildings and quipment -net 186,481 198,384 nvestments in real estate - 2,518 2,875 Other noncurrent assets otal assets 2,470 $444, 57: $426 18 Liabilities and net assets Current liabilities: Current portion of long- term debt $2,804 $8, 153 Accounts payable and curved expenses 32,189 Accrued salaries and 30,090 related liabilities 31, 590 27,909 ue to affiliates, net 1,927 Professional Insurance liabilities -current 6,738 7,767 Other current liabilities 15,534 otal current liabilities 90, 782 78,978 Long-term debt, less current portion 51,250 Accrued pension liability 79.183 46 268 Deferred employee compensation plan abilities 5,396 rofessional insurance ibilities -noncurrent 117,686 106,781 Other noncurrent liabilities 35,402 Total liabilities 56,022 49.759 49,364 Net assets: Without donor restrictions 16,109 with donor restrictions 67,93 8,703 otal net assets 94,812 Total liabilities and net assets $444,571 $426, 185 Consolidated Statements of Operations Revenue, gains and other support 2019 Net patient service revenue 541,30 31,154 Other revenue 36,656 8,057 Net assets released from restrictions 1.562 1,356 Total revenue, gains and ther support 579,519 540,567 Operating expenses Salaries and wages 226,400 23,59 Employee benefits 59,154 6.660 supplies and other expenses 266,356 268,202 terest and amortization of deferred financing fees 3,093 3,180 depreciation and amortization 23 137 24,477 otal operating expenses 578, 140 76, 118 1,379 *35,551) Insurance program premium revision (2,392) Excess (deficiency) of revenue over expenses 1,379 (37,943) Other changes in net assets without donor restrictions Change in unrealized gain and losses on investments other than trading ecurities 4,036 (8,145) Net assets released from estrictions for purchases if property, buildings and equipment 527 hangs In pens 596 o be recognized in fut eriods 12,231 38,728) ncrease(decrease) in net ssets without donor estrictions 18,173 84,220 Consolidated Statement of Cash Flows Year Ended December 31 2019 2018 (In Thousands) Operating activities change in net assets 17.991 (83,105) Adjustments to reconcile change in net assets provided by operating Depreciation an amortization 23,137 24,477 Amortization of deferred financing fees 108 120 wet change in unrealized gains and losses on marketable securities (4,036) 8,145 oss on other-than- temporary impairment of nvestments in captive Insurance companies 3,875 Changes in operating crate and lishilities Patient care accounts receivable, net (263) 437 Other assets 1,568 ) Accounts payable and accrued expenses 2,099 ( 467 ) Accrued salaries and related liabilities 3,681 1,110 Due to affiliates, net (1,061) 509 Accrued pension liability (17,085) 13,271 foressional insurance abilities 9,876 32,947 Other liabilities 14,405 (5,342) Net cash provided by operating activities 47,284 14,768 investing activities Acquisitions of property, buildings and equipment, (8,734) 14,938 Purchases) sales of nvestments, net (18,705) 7,789 Net decrease in investments in real estate 357 357 Net (increase) decrease in assets limited as to use (5,537) 5,871 vet cash used in investing activities (32,619) (921) Financing activities rincipal repayments on long-term debt (14,020) (7,097) Jet cash used in financing activities (14,020) (7,097) Net increase in cash and ash equivalents 6,750 Cash and cash equivalents t beginning of year 40,798 34,048 ash and cash equivalents t end of year 41,443 40,798 Supplemental disclosure of on cash investing and inancing activities obligations 2,500 4,905Liquidity 2019 2018 TABLE 14-3 Liquidity Ratios Current Ratio 1. 13 2.15 Current Assets Current Ratio =- Current Liabilities Quick Ratio Quick Ratio = Cash + Marketable Securities + Receivables Current Liabilities Days Cash on Hand Cash + Marketable Securities Days Cash on Hand = (Operating Expenses - Bad Debts - Depreciation)/365 Efficiency TABLE 14-4 Efficiency Ratios Days in Accounts Receivable Days in Accounts Receivable= Net Accounts Receivable (Net Patient Revenue)/365 Days in Accounts Payable Days in Accounts Payable = Accounts Payable (Operating Expenses - Depreciation)/365 Average Payment Period Current Liabilities Average Payment Period = (Operating Expenses - Depreciation)/365 Total Asset Turnover Total Asset Turnover = Total Revenue Total Assets Solvency Interest Coverage Debt Service Coverage Long-Term Debt to Net Assets Profitability Total Margin Return on Assets Return on Net AssetsAssets Assets Investments Liabilities Net Assets AR Patient care, Less assets Property, Accounts Cash and limited as held by Deferred less allowance limited as buildings Other to use - Current captive payable Deferred Accrued employee Professional Long-term cash Short-term for to use - land Investments Other current current portion of and employee Professional Donor salaries and Due to Other insurance compensation current insurance equipment - in real debt, less Accrued accrued compensationsurance Other portion related affiliates, Without equivalents investments uncollectibles Inventory y Other-net assets noncurrent long-term restricted companies plan assets liabilities - Beginning Balance 41443 56811 net current current pension 70779 portion 6132 12439 estate -net assets debt on plan liabilities - expenses liabilities noncurrent donor With donor 6416 6587 net current liabilities portion liability liabilities a 3000 1276 47099 5396 -1276 186481 2518 2470 2804 32189 31590 noncurrent |liabilities restrictions restrictions 1927 6/38 15534 51,250 29, 183 check 5,396 117,686 55,462 86109 -100 8703 LUUO 3000 540865 150 150 540865 -875 875 400 -5000 -12560 400 342000 .12560 500 -342000 -150 3705 -370 - 150 25000 25000 -54000 -425 -23010 -54000 23010 -425 6257 6416 12439 20859 6587 47099 -1276 310410 556399 55462
