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Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility: Green Valley Nursing Home, Inc., Statement of Income and Retained Earnings, Year Ended December 31, 2015 Assets Green Valley Nursing Home, Inc., Balance Sheet, December 31, 2015 Revenue: Net patient service revenue $3,163,258 Other revenue Total revenues 106,146 $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance 296,357 Current Assets: Cash Marketable securities Net patient accounts receivable Supplies Total current assets Property and equipment Less accumulated depreciation Net property and equipment Total assets $ 105,737 200,000 215,600 87,655 $ 608,992 $2,250,000 356,000 $1,894,000 $2,502,992 (continued) Provision for bad debts 110,000 Depreciation 85,000 (continued from previous page) Interest 206,780 Liabilities and Shareholders' Total expenses $3,180,356 Equity Operating income Current Liabilities: $ 89,048 Accounts payable Provision for income taxes 31,167 Accrued expenses Net income $ 57,881 Notes payable Current portion of long-term debt Total current liabilities $ 72,250 192,900 100,000 80,000 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842 Long-term debt Shareholders' Equity: Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 445,150 $1,700,000 $ 100,000 257,842 $ 357,842 $2,502,992

Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility: Green Valley Nursing Home, Inc., Statement of Income and Retained Earnings, Year Ended December 31, 2015 Assets Green Valley Nursing Home, Inc., Balance Sheet, December 31, 2015 Revenue: Net patient service revenue $3,163,258 Other revenue Total revenues 106,146 $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance 296,357 Current Assets: Cash Marketable securities Net patient accounts receivable Supplies Total current assets Property and equipment Less accumulated depreciation Net property and equipment Total assets $ 105,737 200,000 215,600 87,655 $ 608,992 $2,250,000 356,000 $1,894,000 $2,502,992 (continued) Provision for bad debts 110,000 Depreciation 85,000 (continued from previous page) Interest 206,780 Liabilities and Shareholders' Total expenses $3,180,356 Equity Operating income Current Liabilities: $ 89,048 Accounts payable Provision for income taxes 31,167 Accrued expenses Net income $ 57,881 Notes payable Current portion of long-term debt Total current liabilities $ 72,250 192,900 100,000 80,000 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842 Long-term debt Shareholders' Equity: Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 445,150 $1,700,000 $ 100,000 257,842 $ 357,842 $2,502,992

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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Refer back to Textbook Problem 17.5. Recast the financial statements for Green Valley into common size financial statements. Describe at least two advantages of a common size presentation of financial statements. 

Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility: Green Valley Nursing Home, Inc., Statement of Income and Retained Earnings, Year Ended December 31, 2015 Assets Green Valley Nursing Home, Inc., Balance Sheet, December 31, 2015 Revenue: Net patient service revenue $3,163,258 Other revenue Total revenues 106,146 $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance 296,357 Current Assets: Cash Marketable securities Net patient accounts receivable Supplies Total current assets Property and equipment Less accumulated depreciation Net property and equipment Total assets $ 105,737 200,000 215,600 87,655 $ 608,992 $2,250,000 356,000 $1,894,000 $2,502,992 (continued) Provision for bad debts 110,000 Depreciation 85,000 (continued from previous page) Interest 206,780 Liabilities and Shareholders' Total expenses $3,180,356 Equity Operating income Current Liabilities: $ 89,048 Accounts payable Provision for income taxes 31,167 Accrued expenses Net income $ 57,881 Notes payable Current portion of long-term debt Total current liabilities $ 72,250 192,900 100,000 80,000 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842 Long-term debt Shareholders' Equity: Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 445,150 $1,700,000 $ 100,000 257,842 $ 357,842 $2,502,992
Transcribed Image Text:Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility: Green Valley Nursing Home, Inc., Statement of Income and Retained Earnings, Year Ended December 31, 2015 Assets Green Valley Nursing Home, Inc., Balance Sheet, December 31, 2015 Revenue: Net patient service revenue $3,163,258 Other revenue Total revenues 106,146 $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance 296,357 Current Assets: Cash Marketable securities Net patient accounts receivable Supplies Total current assets Property and equipment Less accumulated depreciation Net property and equipment Total assets $ 105,737 200,000 215,600 87,655 $ 608,992 $2,250,000 356,000 $1,894,000 $2,502,992 (continued) Provision for bad debts 110,000 Depreciation 85,000 (continued from previous page) Interest 206,780 Liabilities and Shareholders' Total expenses $3,180,356 Equity Operating income Current Liabilities: $ 89,048 Accounts payable Provision for income taxes 31,167 Accrued expenses Net income $ 57,881 Notes payable Current portion of long-term debt Total current liabilities $ 72,250 192,900 100,000 80,000 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842 Long-term debt Shareholders' Equity: Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 445,150 $1,700,000 $ 100,000 257,842 $ 357,842 $2,502,992
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