Answered: Dr Fionn opened a hospital on 1st April…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Dr Fionn opened a hospital on 1st April 2015 by investing $500,000 in equipment. The receipt and payments account as on 31st March 2016 is as follows:
Receipts and Payments Account
(photo)

The following further information is also given:
d) Among the conveyance 25% is for a domestic purpose.
e) Stock of drugs on 31st March, 2009 is $35,000.
Prepare the receipts and expenditure account and the balance sheet as on 31st march 2016.

$4
To fees
730,000
By Salaries
190,000
By Purchase of
To Miscellaneous Receipts
75,000
Medicine
97000
by purchase of
To sale of equipment
90,000
equipment
200,000
by rent
45,000
by journals
15,000
by conveyance
50,000
by drawings
74,000
by library books
62,000
by bank
112,000
by cash
50,000
895,000
895,000
%24
%24

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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