Healthcare Finance An Introduction To Accounting And Financial Management 3rd Edition Louis Gapenski PhD - Solutions

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2.1 Indicate which of the following transactions relate to Clive’s business as a newsagent and which are his personal transactions:1 £50 win on Premium Bonds owned by Clive.2 £100 paid for the following advertisement on a hoarding at the local football ground:‘Clive’s for all the up-to-date
2.2 John decides to start up in business on 1 April 20X1, and pays £4,000 from his private bank account into a newly opened business bank account. On 2 April 20X1 John’s father loans the firm £600 to help with the new venture, and this amount is paid immediately into the business bank account.
2.3 Roger starts up in business on 1 September 20X0 with a capital of £1,200 which he pays into his business bank account on that day. The bank agrees to provide him with a business overdraft facility of £1,500 for the first three months. The following business transactions take place:2 Sept A
2.4 The following balance sheet was prepared for Jeff’s business at 1 October 20X0. The firm has an overdraft facility of £700.Jeff Balance Sheet as at 1 October, 20X0 £ £Fixed assets:Machinery 2,200 Capital 5,300 Current assets: Current liabilities Stocks 2,870 Trade creditors 690 Trade
2.5 (a) Prepare the balance sheet of Daley from the following list of assets and liabilities at 31 December 20X1:£Cash 1,750 Stock 5,250 Owed by customers 3,340 Owed to suppliers 2,890 Business premises 9,000 Loan from Weakly 3,000 Remember, Assets = Capital + Liabilities.(b) Prepare the balance
2.6 Prepare balance sheets to determine the amount missing from each of the following columns of balances at 31 December 20X1:A B C D E F£ £ £ £ £ £Capital at 1 Jan 20X1 2,500 2,000 3,000 4,000 3,800 ?Profit for 20X1 1,000 3,200 ? 5,700 2,300 7,000 Drawings during 20X1 800 3,000 1,000 4,900 ?
2.7 Review your understanding of the following concepts and terms discussed in this chapter by writing a short explanation of each of them:1 Accountancy 2 Entity concept 3 Balance sheet 4 Realization concept 5 Trade credit 6 Trading cycle and credit transactions 7 A = C + L 8 Owner’s capital 9
2.8 For a fish-and-chip shop, indicate which of the following items are current liabilities, which are current assets and which are fixed assets:1 Microwave oven 2 2,000 kilos of King Edward potatoes 3 Cash register 4 Amount owing to the Fat Fishy Company Ltd 5 Capital investment of Mr V. Greasy,
2.9 The following list of balances relate to the business of C. Forest at 31 December 20X2:£Plant and machinery 26,500 Stock 14,200 Loan repayable June 20X3 2,500 Capital of C. Forest at 1 January 20X2 52,380 Trade creditors 10,600 Trade debtors 14,100 Cash-in-hand 270 Bank overdraft 3,940 Profit
3.1 The following balance sheet relates to the affairs of Columbus who runs a second-hand car business. The balance sheet of his business at 31 December 20X1 is as follows:Balance sheet as at 31 December 20X1£ £Fixed assets 2,000 Current assets Stock of cars 2,700 Trade debtors 1,000 Bank 1,000
3.2 The following information is obtained in connection with the business of G. Haze, a trader:31 December 20X3 20X4£ £Fixed assets at book value 9,000 see below Stocks 2,650 3,710 Trade debtors 5,200 5,600 Trade creditors 1,710 1,210 Bank balance (overdraft) (360) 50 During 20X4 motor vehicles
3.3 The following table shows the cumulative effects of a succession of separate transactions on the assets and liabilities of a business. Each letter identities the assets and liabilities after each single transaction.Transaction A B C D E F G H I J Assets: £000 £000 £000 £000 £000 £000
4.1 Stoll, a trader, pays all his business takings into his bank account. All business payments are made by cheque. The following is a summary of his bank account for the year 20X5:Bank Summary Receipts Payments Balance Balance 1 January 20X5 480 Received from debtors 31,560 Payments to trade
4.2 Bennett commenced business as a retail trader at the beginning of 20X0. He maintains no formal system of ledger accounts for recording business transactions. An accountant has been asked to prepare the accounts for the year ending 20X1 in order to enable tax liabilities to be agreed. The
4.3 The following is the balance sheet of Stondon, a trader, at 31 December 20X3:Stondon Balance sheet as at 31 December 20X3 £ £ £Fixed assets Furniture and fittings 800 Current assets Stock 5,384 Trade debtors 4,162 Bank 888 10,434 Less: Current liabilities Trade creditors −3,294 Working
4.4 Bert Negus inherited £200,000 during February 1995. This provided him with an opportunity to leave his job as an electrical maintenance engineer with a local company and to start up his own business. After giving the matter much consideration he decided to set up as a retailer of electrical
4.5 The following details are extracted from the books of the Fellowship Club:Balances at 31 Dec. 20X7 31 Dec. 20X8£ £Bar stock 8,200 11,936 Creditors for bar supplies 4,080 4,568 Creditors for expenses 160 248 Summary of Bank Account for 20X8 Receipts £ Payments £Balance 1 January 20X8 13,280
4.6 The Ridlingham Recreation Club consists of a tennis section and a rugby section. The following information has been obtained relating to the position of the club on 1 January 20X1:£Clubhouse at cost 38,000 Creditors for bar purchases 3,720 Creditors for general expenses 500 Tennis courts at
4.7 You have agreed to take over the role of bookkeeper for the AB Sports and Social Club.The summarized balance sheet on 31.12.94 as prepared by the previous bookkeeper, contained the following items.Assets £ £Heating oil for clubhouse 1,000 Bar and café stocks 7,000 New sportswear for sale, at
5.1 Mr Wall decided to set up in business as a sole trader on 1 January 20X1. He opened a business bank account into which he pays all the takings and from which he pays all business costs. His transactions for January 20X1 were as follows:(a) Pay £5,000 into the bank as capital on 1 January.(b)
5.2 Blue Land plc’s financial year ends on 22’ May 1998. A number of activities must be undertaken before the final accounts can be prepared.Update Blue Land plc’s cash book and reconcile it with the bank statement. (10 marks)ICSA, Paper 6, Introduction to Accounting, June 1998 (adapted) (a)
5.3 Ray Gunne set up in business on 1 January 20X3. The firm’s transactions for the first week of January 20X3 were as follows:(a) Pay capital of £10,000 into the bank.(b) Buy premises for £8,000 and equipment for £2,750 – both paid by cheque.(c) Borrow £5,000 from Gunne’s brother. He
5.4 At the start of a trading week the bank account of Laser Ltd showed that the company was £6,510 overdrawn. During the week the company undertook the following cash transactions:Day Receipts £ Payments £1 Sales 1,790 Purchases 2,250 2 Sales 2,190 Wages 380 3 Sales 1,250 Sale of fixed asset
5.5 A young and inexperienced book-keeper is having great difficulty in producing a bank reconciliation statement at 31 December. He gives you his attempt to produce a summarized cash book, and also the bank statement received for the month of December. These are shown below. You may assume that
5.6 Office Ltd owns a shop that sells typewriters and also repairs office equipment. The following credit sales took place:Day 1 Sold a typewriter for £300 and stationery for £75 to Gum Ltd.Repaired Clue Ltd’s typewriter for £100.Day 2 Sold stationery to Stick Ltd for £70.Day 3 Sold a
5.7 On 2 April 1993 Mostar Motors Ltd received their monthly bank statement which showed that there was a bank overdraft of £2,129. This balance was not in agreement with the balance shown in the bank column of the company’s cash book. The chief cashier carried out a reconciliation which
6.1 The following are the balances on the accounts of Radio on 1 January:Credit balances £ £Capital 8,500 Trade creditors:Tele 2,300 Trany 1,000 Valve 1,300 4,600 13,100 Debit balances Plant and machinery at written-down value 4,500 Stock 2,700 Debtors: Vision 2,500 Sister 1,500 Batty 1,200 5,200
6.2 During January, Radio undertook the following transactions:Credit transactions with customers during January Prompt Returns Cash Payment Customer Sales Inwards Received Discount£ £ £ £Vision 7,000 300 6,350 50 Sister 4,000 – 3,500 40 Batty 2,700 200 2,600 25 Flat 200 – – –Broke 300
6.3 Use the information in Questions 6.1 and 6.2 to prepare the ledger accounts, other than cash, in Radio’s main ledger.
6.4 Use the information in Questions 6.1 and 6.2 to prepare the memorandum debtors and creditors ledger.
6.5 Use the information in Questions 6.3 and 6.4 to prepare reconciliations of the purchases and sales ledger accounts with their memorandum ledgers.
6.6 Prepare Radio’s trial balance from the accounts produced in Questions 6.2 and 6.3.
6.7 (a) Define and distinguish, with examples, the following three classifications of ledger accounts:(i) real accounts;(ii) personal accounts;(iii) nominal accounts.(b) Give the appropriate classification for each of the following account balances:(i) fixed assets at cost, £10,000;(ii) wages
6.8 Explain how the accountant makes use of the trial balance.
6.9 The following particulars have been extracted from the books of a trading concern for the year ended 30 September 20X1:£1 Sales ledger debit balances at 1October 20X0 102,300 2 Sales ledger credit balances at 1October 20X0 340 3 Credit sales 630,800 4 Cash sales 140,100 5 Cash received from
6.10 Ian Error has produced a trial balance for his business for the year to 30 September 20X2 that does not balance, and the error has been placed in a suspense account.An examination of the company’s books reveals the following errors:(a) An invoice from Zed amounting to £1,000, for goods
6.11 (a) Aries Ltd maintains a creditors ledger control account in its general ledger as part of its double entry system. Individual accounts for suppliers are maintained on a memorandum basis in a separate creditors ledger.The following totals are available for the financial year ended 30 November
6.12 The following information for the financial year ended 31 May 1991 has been extracted from the accounting system of George Peace Ltd:£Discounts allowed to credit customers 4,170 Cash and cheques received from credit customers 144,700 Discounts received from suppliers 3,910 Cash and cheques
6.13 The following is a list of typical business transactions:(a) The purchase of goods on credit.(b) Allowances to credit customers upon the return of faulty goods.(c) Refund from petty cash to an employee of an amount spent on entertaining a client.(d) Credit card sales.(e) The recovery of a debt
6.14 After completing a training course at a technical college, Michael Faraday set up in business as a self-employed electrician on 1 January 19X5. He was very competent at his job but had no idea how to maintain proper accounting records. Sometime during 19X5 one of his friends asked Michael how
7.1 The following is the trial balance of Push, a sole trader, at 30 June 20X7:£ £Capital 30,350 Sales 108,920 Purchases 72,190 Drawings 12,350 Debtors 7.350 Creditors 6,220 Cash 1,710 Stock 9,470 Plant and machinery at cost 35,000 Accumulated depreciation at 1 July 19X6 12,500 Rent 1,000 Wages
7.2 Tip was established and started trading on 1 January 20X1 and draws up its accounts to 31 December each year. Its purchases and disposals of fixed assets over the subsequent three years were as follows:Asset Date of purchase Cost Date of disposal Proceeds on disposal£ £A 1 January 20X1 5,000
7.3 Prepac Ltd prepared its accounts to 31 December. The following facts relate to 20X8:£Balance on insurance account 1 January 450 (Dr.)Balance on electricity account 1 January 300 (Cr.)Balance on rates account 1 January 290 (Dr.)Balance on gas account 1 January 600 (Cr.)February – pay for
7.4 At 31 December 20X3 the trial balance of Damp Ltd contained the following balances in repect of motor vehicles:Debit Credit£ £Motor vehicles at cost 127,000 Accumulated depreciation at 1 January 20X3 76,000 Disposal of motor vehicles 1,600 You ascertain that during 20X3 the following
7.5 At 31 December 20X0 the following balances were shown in the books of E. Rider Ltd:£Sales control account 156,937 (Dr.)Provision for doubtful debts 2,600 (Cr.)Bad debts 750 (Dr.)The list of debtors contained balances that were considered to be bad or doubtful as indicated in the ‘remarks’
7.6 At 31 December 19X7 the totals of the ledger balances of Theta Limited, were as follows:£Sales debit 384,600 credit 2,900 Purchases debit 1,860 credit 222,230 After reviewing these balances in preparing the financial statements for the year ended 31 December 19X7, a number of adjustments are
7.7 During the preparation of the accounts from the books of S. Top, a sole trader, for the year to 30 June 20X7, the following items were found:1 Included in the repairs to machinery account was £2,750, which was paid on 29 June 20X7 and was for the purchase of a new lathe.2 Manufacturing wages
8.1 (a) How would you distinguish between capital and revenue expenditure, and why is it important to make a correct allocation?(b) State, with reasons, in which of the two categories you would place the following items:(i) Replacement of the blade on a cutting machine damaged as the result of
8.2 Simon is a surveyor who purchases old properties in poor condition. He incurs expenditure on improving these properties, which he then resells. His balance sheet at 31 December 20X2 was as follows:£Properties on hand(including expenses on purchase):1 30,250 2 29,350 Bank balance 19,400 79,000
8.3 On 1 January 199X a business purchased a Minilab to process and print films. The Minilab costs £28,000 and has an estimated economic life of 4 years, after which it will have no residual value. The financial year of the business ends on 31 December.It is estimated that the output from the
8.4 Buy paid Mr Sale £120,000 cash to acquire his business, Sale & Co., as a going concern on 1 January 20X1. The assets taken over were considered to be worth the following amounts:£Fixed assets 71,500 Stock 20,000 Debtors 10,000 In addition, Buy assumed responsibility for paying Sale & Co.’s
8.5 Give the basic rule for valuing stock. Apply this rule to the facts provided below and calculate the total value of stock to be included in the accounts.Product Cost Net realizable value£ £A 2,400 2,760 B 1,290 740 C 3,680 750 D 2,950 4,760 E 6,280 9,730
8.6 Brothers manufacture one type of high-quality ornament for the export market. The firm plans its activities three months in advance and its estimates for January, February and March 1994 are as follows:Units Stock of ornaments at 1 January Nil Ornaments produced during: January 450 February 480
8.7 What do you understand by the terms ‘perpetual inventory’ and ‘periodic stocktake’?In the case of a trader, how is the figure for cost of goods sold obtained under each of these systems?
8.8 D. Hart, a trader dealing in one product only, has the following transactions over a six-month period:Date Quantity (in units) Unit cost (£)Purchases 1 June 1992 1,500 90 1 August 1992 2,000 92 1 October 1992 3,000 93 Sales June 1992 340 140 July 1992 700 140 August 1992 800 144 September 1992
8.9 Airwaves Ltd are retailers who sell mobile telephones. During January to March 1993 they decided to concentrate their selling activities on the ‘Meteor’ model, which experienced several cost price fluctuations during the period. The company found that because of this it had to adjust its
8.10 Stoval Ltd started to trade on 1 January 20X1. Its purchases of trading stock, at cost, during the first three years of business were£20X1 240,000 20X2 252,000 20X3 324,000 The values of stock at 31 December, under different valuation methods, were Lower of FIFO cost and net 31 December LIFO
8.11 Where accounts are prepared in accordance with the accruals concept, cash receipts and payments may precede, coincide with or follow the period in which revenues and expenses are recognized. Give two examples of each of the following:(a) A cash receipt that precedes the period in which revenue
8.12 The summarized trading account of Change Ltd for 20X1 contained the following information:Trading Account for 20X1£ £Sales 100,000 Less: Opening stock 7,000 Purchases 80,000 Closing stock (11,000)Cost of goods sold 76,000 Gross profit 24,000 Opening stock is valued at marginal cost, but the
8.13(i) Dual aspect;(ii) consistency;(iii) prudence;(iv) matching/accruals; and(v) going concern.(a) Briefly explain each of the concepts mentioned above. (10 marks)(b) Explain how each of the concepts will affect the preparation of the final accounts of a company. (10 marks)(Total: 20 marks)(ICSA,
8.14 (a) SSAP 9, Stocks and Long-Term Contracts, requires stocks of raw materials and finished goods to be valued in financial statements at the lower of cost and net realizable value.(i) Appendix 1 to SSAP 9 states that in arriving at the cost of stock, methods such as last in first out (LIFO) are
9.1 Jupiter, Mars and Saturn are in partnership sharing profits and losses in the ratio 2 : 1 : 1.The balance sheet of the partnership as at 30 June 1984 disclosed the following financial position:£ £ £ £ £Cost Dep. Net Capital accounts Fixed assets Jupiter 55,000 Freehold land Mars 32,000 and
9.2 Second and Minute started trading as retail grocers in partnership on 1 January 20X4, but did not keep a set of double-entry books. The firm’s bank account, for 20X4, prepared from the record of cheques issued and cash paid into the bank, was£ £Capital introduced: Purchases 160,000 Second
9.3 The following is the trial balance of Bean and Stalk, who trade in partnership, at 31 March 20X3:£ £Capital account balances at 1 April 20X2:Bean 30,000 Stalk 10,000 Current account balances at 1 April 20X2:Bean 3,000 Stalk 5,000 Sales 150,000 Stock at 1 April 20X2 30,000 Wages 14,500 Rent
9.4 Amir and Barry are in partnership with contributed capitals of £70,000 and £50,000, respectively. They have agreed the following appropriation scheme:(a) Interest is to be allowed on contributed capital at 12 per cent per annum.(b) Interest is to be charged on drawings.(c) Amir and Barry are
9.5 Alpha, Beta and Gamma were in partnership for many years, sharing profits and losses in the ratio 5 : 3 : 2 and making up their accounts to 31 December each year. Alpha died on 31 December 19X7, and the partnership was dissolved as from that date.The partnership balance sheet at 31 December
10.1 The following trial balance was extracted from the accounts of Minto plc at 31 October 1986.£ £Called-up share capital 200,000 Share premium 100,000 12% debentures 225,000 Fixed assets at cost:Freehold premises at cost 435,000 Machinery and equipment 60,000 Motor lorries 225,000 Provisions
10.2 You are presented with the following trial balance of Lincoln plc as at 31 December 1992.£000 £000 Share capital, 50p ordinary shares 1,000 Share premium 500 15% debentures 800 Profit and loss balance 1 January 200 Purchases and sales 2,400 5,000 Purchase returns and sales returns 100 150
10.3 (a) Within the field of periodic financial reporting, comment on and distinguish between ‘accounting bases’ and ‘accounting policies’ and relate them to the following fundamental accounting concepts:(i) the ‘going concern’ concept;(ii) the ‘accruals’ concept;(iii) the
10.4 The following trial balance was extracted from the books of Porchester Ltd on 31 March 20X6:£ £Ordinary share capital (£1 shares) 500,000 Retained profit to 1 April 20X5 1,039,000 10% debentures repayable 20X9 300,000 Freehold land and buildings at cost 400,000 Plant and machinery at cost
10.5 What is the purpose of a bonus issue of shares? Using the information prepared in your answer to Question 10.4, consider whether the issue was reasonable in amount.
10.6 The trial balance of Southgate plc at 31 December 20X9 was as follows:£ £Ordinary share capital (shares £1 each) 500,000 Freehold property at cost 500,000 Furniture and equipment at cost 375,000 Provision for depreciation of furniture and equipment, 1 January 20X9 59,500 Debtors and
10.7 The following balances existed in the accounting records of Koppa Ltd at 31 December 19X7.£000 Development costs capitalized, 1 January 19X7 180 Freehold land as revalued 31 December 19X7 2,200 Buildings – cost 900– aggregate depreciation at 1 January 19X7 100 Office equipment – cost
The balance sheets of Southall Ltd at 31 December 20X1 and 31 December 20X2 are as follows:Balance sheets as at 31 December 20X1 and 20X2 20X1 20X2 £000 £000 £000 £000 Fixed assets Plant at cost 52.0 70.0 Less: Accum depreciation − 16.5 − 22.7 35.5 47.3 Vehicles at cost 10.0 10.0 Less:
11.2 The following balances relate to the affairs of Tufton Ltd as at 31 March 20X0 and 20X1.20X0 20X1£ £Share capital 500,000 600,000 Retained profit 395,800 427,100 10% Debentures 200,000 300,000 Creditors 179,800 207,500 Proposed dividends 50,000 60,000 Bank overdraft – 36,900 1,325,600
11.3 The following information is provided for Sharpener Ltd:Balance sheets as at 31 December 20X4 20X5£ £Fixed assets Cost 650,000 680,000 Less: Accumulated depreciation − 176,500 − 203,700 473,500 476,300 Current assets Stock 126,400 127,500 Trade debtors 97,700 95,000 Bank balance 23,600
11.4 The summarized final accounts of Jordin plc are detailed below.Profit and loss account for the year ended 31 May 1996 1997£m £m Sales 500 550 Cost of goods sold (240) (260)Overheads (182) (204)Interest payable (20) (16)Net profit 58 70 Corporation tax (18) (21)Dividends (22) (24)Retained
11.5 The balance sheets of Rapier Ltd at 30 September 1996 and 30 September 1997 are given below.Balance sheets as at 30 September 1996 1997£000 £000 £000 £000 Fixed assets (see note 1)Cost 600 730 Aggregate depreciation 220 240 380 490 Current assets Stock 81 90 Debtors 90 86 Cash 4 7 175 183
12.1 The summarized trading and profit and loss account of Rubber Ltd for 20X1 and its summarized balance sheet at 31 December 20X1 are as follows:Trading and profit and loss account for 20X1£Sales 180,000 Cost of sales −126,000 Gross profit 54,000 Expenses (fixed) −39,000 Net profit 15,000
12.2 The balance sheets of Galston Ltd as at 31 December 20X5 and 20X6 are as follows:Galston Ltd Balance sheet as at 31 December 20X5 20X6£ £ £ £Fixed assets at cost 303,000 367,500 Less: Accumulated depreciation − 124,500 − 157,500 178,500 210,000 Current assets Stocks 37,500 75,000
12.3 The following information has been extracted from the accounts of Lock Ltd, a wholesale trading company:Balances at 31 December 20X1 20X2£ £Fixed assets 500,000 550,000 Trade debtors 125,000 150,000 Cash at bank 25,000 –Proposed dividend 20,000 60,000 Overdraft – 20,000 Trade creditors
12.4 Beta Ltd is reviewing the financial statements of two companies, Zeta Ltd and Omega Ltd. The companies trade as wholesalers, selling electrical goods to retailers on credit. Their most recent financial statements appear below.Profit and loss accounts for the year ended 31 March 19X8 Zeta
12.5 The following information is obtained in connection with the affairs of two companies, manufacturing specialized metal products, in respect of the year ended 31 December 20X5:Metalmax Precision Ltd Products Ltd£000 £000 Sales 800 950 Administration expenses 30 30 Selling expenses (including
12.6 The following information is provided relating to the affairs of two companies engaged in similar trading activities:Hot Ltd Cold Ltd£ £Ordinary share capital 800,000 500,000 15% debentures 200,000 500,000 Each company earned a trading profit before finance charges of £110,000 in year 1 and
12.7 The following information relates to the affairs of General Engineering plc:Balance sheets at 31 December 20X7 20X8£000 £000 £000 £000 Fixed assets Plant at cost less depreciation 2,600 2,760 Property at cost less depreciation 800 700 Investment at cost 300 250 3,700 3,710 Current assets
12.8 Emerald Ltd and Garnet Ltd are two companies engaged in manufacturing electrical appliances. Both operate from rented premises. Their financial statements at 31 March 1997 were as follows.Profit and loss accounts for the year ended 31 March 1997 Emerald Garnet£000 £000 £000 £000 Sales
12.9 Pereniv Ltd You work in the accounts department of Pereniv Ltd, a company which manufactures materials which it supplies to electrical goods manufacturers. Normal credit terms in the industry, for both suppliers and customers, require payment within 30 days from the end of the month in which
12.10 The following trial balance has been extracted from the ledgers of JK Ltd at 31 March 1993:£ £Sales (all on credit) 647,400 Stock (1 April 1992) 15,400 Trade debtors and creditors 82,851 41,936 Purchases (all on credit) 321,874 Carriage in 13,256 Carriage out 32,460 Electricity 6,994
13.1 Glen Eagles is the proprietor of a small but long-established manufacturing business that has consistently made an annual profit of £20,000. The financial results of the business have shown little change in recent years, and the financial position has been very stable, supported by the fact
13.2 Tassell Ltd is a manufacturing company specializing in the production of two machines, XX and YY. The manufacturing process for the two machines is different and this necessitates a separate production department for each. The managing director of the company is considering a revised selling
13.3 During 20X4 Feather Ltd, which has a maximum possible output of 100,000 units, sold 60,000 units of a product and made a net profit of £20,000. The contribution per unit was £2, and the selling price was £5 per unit.A competitor entered the market in November 20X4, and is selling a very
13.4 Use the information in Question 13.3 to prepare a break-even chart that shows the results of both 20X4 and 20X5.
13.5 The summarized profit and loss account of Latchmere Ltd for 20X6 is as follows:£ £Sales (100,000 units @ £2 each) 200,000 Raw materials 50,000 Wages 100,000 Depreciation 10,000 160,000 Gross profit 40,000 General expenses 20,000 Net profit 20,000 The company’s plant has now reached its
13.6 The directors of Axmede Ltd have decided that the company has £100,000 available for investment in fixed assets and are considering the following two alternative projects, both of which are expected to have a life of four years, at the end of which the plant will have a zero scrap value:The
13.7 The balance sheet of Harris Ltd as at 30 November 1993 is shown below:You are informed that:(i) The firm’s anticipated sales and purchases for the next six months are:£000 £000 December 410 205 January 290 224 February 364 236 March 392 249 April 440 273 May 484 293 (ii) Customers are
Drugs ‘R Us operates a mail order pharmaceutical business on the West Coast. The firm receives an average of $325,000 in payments per day.On average, it takes four days for the firm to receive payment, from the time customers mail their checks to the time the firm receives and processes them. A
Consider the following 2007 data for Newark General Hospital (in millions of dollars):a. Calculate and interpret the profit variance.b. Calculate and interpret the revenue variance.c. Calculate and interpret the cost variance.d. Calculate and interpret the volume and price variances on the revenue
Suncoast Healthcare is planning to acquire a new x-ray machine that costs $200,000. The business can either lease the machine using an operating lease or buy it using a loan from a local bank. Suncoast’s balance sheet prior to acquiring the machine is a follows:a. What is Suncoast’s current
Big Sky Hospital plans to obtain a new MRI that costs $1.5 million and has an estimated four-year useful life. It can obtain a bank loan for the entire amount and buy the MRI or it can lease the equipment. Assume that the following facts apply to the decision:• The MRI falls into the three-year
Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and equity reinvestment (asset) requirements are shown below (in millions):Briarwood’s cost of equity is 16 percent. The best estimate for Briarwood’s

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Healthcare Finance An Introduction To Accounting And Financial Management 3rd Edition Louis Gapenski PhD - Solutions

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