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Liabilities and Shareholders' Equity Consider this balance sheet: Assets Green Valley Nursing Home, Inc. Current Assets: Cash Balance Sheet December 31, 2015 Short-term investments Net patient accounts receivable Supplies Total current assets Property and equipment Current Liabilities: Accounts payable Accrued expenses Notes payable Total current liabilities Long-term debt $ 105,737 Total liabilities Shareholders' Equity: 200,000 215,600 87,655 $ 608,992 $2,250,000 Less accumulated depreciation 356,000 Net property and equipment Total assets $1,894,000 $2,502,992 Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 72,250 192,900 180,000 $ 445,150 1,700,000 $2,145,150 $ 100,000 257,842 $ 357,842 $2,502,992 a. How does this balance sheet differ from the ones presented in Exhibit 4.1 and Problem 4.5? b. What is Green Valley's net working capital for 2015? c. What is Green Valley's debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare? EXHIBIT 4.1 Assets Sunnyvale Clinic: Current Assets: Balance Sheets December 31, 2015 and 2014 (in thousands) Cash and cash equivalents Short-term investments Net patient accounts receivable Inventories Total current assets Current Liabilities: Notes payable Accounts payable 2015 2014 $ 12,102 $ 6,486 10,000 5,000 28,509 3.695 25.927 2,302 $54.306 $ 39.715 Long-term investments Reference to A Net property and equipment Total assets 48,059 52.450 $154,815 25,837 49.549 $115,101 Liabilities and Equity $ 4.334 Accrued expenses 5,022 6,069 $ 3.345 6,933 5.037 Total current liabilities $15.425 $15.315 Long-term debt 85,322 53.578 4.5 Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2015 (in thousands) Assets Reference to A Liabilities and Net Assets Accounts payable-medical services Accrued expenses Notes payable Total liabilities $100,747 $68,893 Net assets (Equity) 54,068 46,208 $2,145 Total liabilities and equity $154,815 $115,101 929 382 Current Assets: Cash $2,737 Total current liabilities $3,456 Net premiums receivable 821 Long-term debt 4,295 Supplies 387 Total liabilities $7,751 Total current assets $3,945 Net assets-unrestricted (equity) 2,118 Net property and equipment 5,924 Total liabilities and net assets $9,869 Total assets $9,869

Liabilities and Shareholders' Equity Consider this balance sheet: Assets Green Valley Nursing Home, Inc. Current Assets: Cash Balance Sheet December 31, 2015 Short-term investments Net patient accounts receivable Supplies Total current assets Property and equipment Current Liabilities: Accounts payable Accrued expenses Notes payable Total current liabilities Long-term debt $ 105,737 Total liabilities Shareholders' Equity: 200,000 215,600 87,655 $ 608,992 $2,250,000 Less accumulated depreciation 356,000 Net property and equipment Total assets $1,894,000 $2,502,992 Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 72,250 192,900 180,000 $ 445,150 1,700,000 $2,145,150 $ 100,000 257,842 $ 357,842 $2,502,992 a. How does this balance sheet differ from the ones presented in Exhibit 4.1 and Problem 4.5? b. What is Green Valley's net working capital for 2015? c. What is Green Valley's debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare? EXHIBIT 4.1 Assets Sunnyvale Clinic: Current Assets: Balance Sheets December 31, 2015 and 2014 (in thousands) Cash and cash equivalents Short-term investments Net patient accounts receivable Inventories Total current assets Current Liabilities: Notes payable Accounts payable 2015 2014 $ 12,102 $ 6,486 10,000 5,000 28,509 3.695 25.927 2,302 $54.306 $ 39.715 Long-term investments Reference to A Net property and equipment Total assets 48,059 52.450 $154,815 25,837 49.549 $115,101 Liabilities and Equity $ 4.334 Accrued expenses 5,022 6,069 $ 3.345 6,933 5.037 Total current liabilities $15.425 $15.315 Long-term debt 85,322 53.578 4.5 Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2015 (in thousands) Assets Reference to A Liabilities and Net Assets Accounts payable-medical services Accrued expenses Notes payable Total liabilities $100,747 $68,893 Net assets (Equity) 54,068 46,208 $2,145 Total liabilities and equity $154,815 $115,101 929 382 Current Assets: Cash $2,737 Total current liabilities $3,456 Net premiums receivable 821 Long-term debt 4,295 Supplies 387 Total liabilities $7,751 Total current assets $3,945 Net assets-unrestricted (equity) 2,118 Net property and equipment 5,924 Total liabilities and net assets $9,869 Total assets $9,869

FINANCIAL ACCOUNTING
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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Consider this balance sheet: Green Valley Nursing Home, Inc. Balance Sheet December 31, 2015 Current Liabilities: Accounts payable Accrued expenses Notes payable Total current liabilities Assets Long-term debt Current Assets: Cash Short-term investments Net patient accounts receivable Supplies Total current assets Property and equipment $ 105,737 Total liabilities Shareholders' Equity: 200,000 215,600 Common stock, $10 par value Retained earnings 87,655 $ 608,992 Less accumulated depreciation $2,250,000 356,000 Net property and equipment Total assets $1,894,000 $2,502,992 Liabilities and Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity $ 72,250 192,900 180,000 EXHIBIT 4.1 Sunnyvale Clinic: Balance Sheets December 31, 2015 and 2014 $ 445,150 1,700,000 $2,145,150 $ 100,000 (in thousands) 257,842 $ 357,842 $2,502,992 a. How does this balance sheet differ from the ones presented in Exhibit 4.1 and Problem 4.5? b. What is Green Valley's net working capital for 2015? c. What is Green Valley's debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare? Reference to A. Assets Current Assets: Cash and cash equivalents Short-term investments Net patient accounts receivable Inventories Total current assets Long-term investments Net property and equipment Total assets Liabilities and Equity Current Liabilities: Notes payable Accounts payable Accrued expenses Total current liabilities Long-term debt 2015 2014 $ 12,102 $ 6,486 10,000 5,000 28,509 3,695 25,927 2,302 $ 39,715 48,059 52,450 $154,815 25,837 49,549 $115,101 $ 54,306 $ 4,334 $ 3,345 5,022 6,069 6,933 5,037 $ 15,315 53,578 $ 15,425 85,322 4.5 Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2015 (in thousands) Assets Reference to A. Liabilities and Net Assets Accounts payable-medical services Accrued expenses Notes payable Total liabilities $100,747 Net assets (Equity) 54,068 $ 68,893 46,208 $2,145 Total liabilities and equity $154,815 $115,101 929 382 Current Assets: Total current liabilities $3,456 Cash $2,737 Net premiums receivable 821 Long-term debt 4,295 Supplies 387 Total liabilities $7,751 Total current assets $3,945 Net assets unrestricted (equity) 2,118 Net property and equipment 5,924 Total liabilities and net assets $9,869 Total assets $9,869
Transcribed Image Text:Consider this balance sheet: Green Valley Nursing Home, Inc. Balance Sheet December 31, 2015 Current Liabilities: Accounts payable Accrued expenses Notes payable Total current liabilities Assets Long-term debt Current Assets: Cash Short-term investments Net patient accounts receivable Supplies Total current assets Property and equipment $ 105,737 Total liabilities Shareholders' Equity: 200,000 215,600 Common stock, $10 par value Retained earnings 87,655 $ 608,992 Less accumulated depreciation $2,250,000 356,000 Net property and equipment Total assets $1,894,000 $2,502,992 Liabilities and Shareholders' Equity Total shareholders' equity Total liabilities and shareholders' equity $ 72,250 192,900 180,000 EXHIBIT 4.1 Sunnyvale Clinic: Balance Sheets December 31, 2015 and 2014 $ 445,150 1,700,000 $2,145,150 $ 100,000 (in thousands) 257,842 $ 357,842 $2,502,992 a. How does this balance sheet differ from the ones presented in Exhibit 4.1 and Problem 4.5? b. What is Green Valley's net working capital for 2015? c. What is Green Valley's debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare? Reference to A. Assets Current Assets: Cash and cash equivalents Short-term investments Net patient accounts receivable Inventories Total current assets Long-term investments Net property and equipment Total assets Liabilities and Equity Current Liabilities: Notes payable Accounts payable Accrued expenses Total current liabilities Long-term debt 2015 2014 $ 12,102 $ 6,486 10,000 5,000 28,509 3,695 25,927 2,302 $ 39,715 48,059 52,450 $154,815 25,837 49,549 $115,101 $ 54,306 $ 4,334 $ 3,345 5,022 6,069 6,933 5,037 $ 15,315 53,578 $ 15,425 85,322 4.5 Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2015 (in thousands) Assets Reference to A. Liabilities and Net Assets Accounts payable-medical services Accrued expenses Notes payable Total liabilities $100,747 Net assets (Equity) 54,068 $ 68,893 46,208 $2,145 Total liabilities and equity $154,815 $115,101 929 382 Current Assets: Total current liabilities $3,456 Cash $2,737 Net premiums receivable 821 Long-term debt 4,295 Supplies 387 Total liabilities $7,751 Total current assets $3,945 Net assets unrestricted (equity) 2,118 Net property and equipment 5,924 Total liabilities and net assets $9,869 Total assets $9,869
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