400-600 words APA 6 format, in-text citation, Use at least two (2) scholarly references to substantiate your work. Please provide a copy of all references used.
Assignment Details:
Scenario
Established in 1977, Krona Community Hospital is a 60-bed, acute care hospital located in the heart of Banconota County. With a staff of nearly 100 physicians and specialists, 400 employees and 75 volunteers, they offer a full range of health care services. They are accredited by The Joint Commission.
Nouveau Health, a private, not-for-profit health care chain, took over management Krona Hospital. Last year, state officials began to discuss Nouveaus proposal to build a new, replacement hospital in Banconota County. The new facility would have 74 acute care beds, four observation rooms, four surgical operating rooms, one c-section room, a 24-hour emergency department, a maternity center, an intensive care unit, and an extensive outpatient center that will provide service such as diabetes treatment, physical therapy, speech pathology, and so forth.
You are a staff member in the finance department at Nouveau Health, whose sole responsibility is to advance the success of the organization through assisting in planning, forecasting, and finance management.
Primary Task Response: A wellness program includes services with exercise programs and chronic disease management to catch problems early so that a customer can be seen in urgent care or a doctor’s office instead of ending up in the hospital. It increases outpatient revenue and decreases inpatient admissions and readmissions thereby, hopefully, decreasing risk for financial loss. Familiarize yourself with an example of a wellness center at the following web site:
https://www.bswhealth.com/locations/waco-getterman-wellness-center
Based on Kronas budget, consider the effects that a Wellness Program provides to Krona. If the wellness program is to include outpatient revenue, home health revenue, and pharmacy revenue, discuss how outpatient and inpatient revenue will differ with these budgetary goals. Include the following:
What has to occur for inpatient revenue to increase?
How do readmission rates affect inpatient revenue?
How do outpatient services increase reimbursement in a Wellness Center?
How can expenses be controlled to improve revenue?
Click here for last years budget.** Attached in documents**
20XX
KRONA HOSPITAL OPERATING BUDGET FOR 20XX
Revenues
Inpatient
$ 25,000,000
Outpatient
15,000,000
Emergency Room
10,000,000
Laboratory
5,000,000
Pharmacy
1,500,000
Home Health and Hospice
1,500,000
Ambulance Services
950,000
Substance Abuse
250,000
Other
850,000
Subtotal
$ 60,050,000
Less Chartiy Care
18,000,000
Net Revenues
$ 42,050,000
Expenses
Payroll (including nursing salaries)
$ 12,500,000
Benefits
3,000,000
Contract Labor
100,000
Insurance
300,000
General Services (laundary, security, etc)
3,000,000
Depreciation
1,500,000
Interest Expense
300,000
Professional Services
10,000,000
Total Operating Expenses
$ 30,700,000
Net Income
$ 11,350,000
Sheet2
Sheet3
SHOW MORE…
Acc-201 Final Project
Competencies
In this project, you will demonstrate your mastery of the following competencies:
Record and present financial information by applying the appropriate framework and guidelines of accounting for business transactions
Determine asset accounts and their disclosure in the financial statements
Determine liability and equity accounts and their disclosure in the financial statements
Scenario
You were recently hired as an entry-level bookkeeper for a service business that recently opened. This is the first month in operation for the business and your first task is to record business transactions for their first month using the source documents and transaction data the owner will provide to you. Because this is a small business that does not use computerized accounting, you will apply the accounting cycle in Excel to record transactions and generate financial reporting results for the owner.
Directions
Company Accounting Workbook
Use accepted accounting principles to follow and record your business transactions for a one-month period from the first step of the accounting cycle through the reporting process. You will build on the workbook you created in Milestones One and Two, or you may start over with the blank Company Accounting Workbook Template (linked below in the What to Submit section), incorporating instructor feedback where applicable. After you complete your workbook, you will prepare a summary report of your work.
Your completed accounting workbook will consist of journal entries for each transaction and postings of transactions to account ledgers. You will develop a trial balance from the ledger balances, and use these balances to prepare the income statement, statement of owner’s equity, and the balance sheet. After the preparation of the financial statements, closing entries will be entered to transfer earnings to equity and prepare temporary accounts for the new accounting period.
Use the instructions below to complete your workbook. Specifically, you must address the following rubric criteria:
Record Financial Data: Use accepted accounting principles to accurately capture business transactions for the month using the data provided in the accounting data appendix (linked in the Supporting Materials section). You will need to address the following:
Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information.
Completeness: Prepare entries that are complete for the month, including transferring posted entries to T accounts.
Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the Trial Balance tab of the company accounting workbook, ensuring that the total debits and credits match.
Financial Statements: Create financial statements using appropriate methods based on accepted accounting principles. Be sure to prepare these financial statements in the order listed, as there are important interdependencies among them. Finalize the process by closing temporary accounts.
Income Statement: Prepare the income statement using the adjusted trial balance.
Statement of Owners Equity: Prepare the statement of owners equity using the adjusted trial balance.
Balance Sheet Assets: Prepare the balance sheet asset entries using the adjusted trial balance.
Balance Sheet Liabilities: Prepare the balance sheet liabilities entries using the adjusted trial balance.
Closing Entries: Complete the Closing Entries tab of the company accounting workbook by closing all temporary income statement amounts to create closing entries.
Summary Report
After you have finished preparing all the financial statements, analyze the statements and write a short report summarizing your findings. Use the template provided in the What to Submit section to complete your report. There is also a Final Project Walkthrough video available in Supporting Materials that will provide guidance for completing your template. In addition to the financial statement results, the owners have requested that you provide them with additional information as further growth is anticipated. They would like more input from you to support the best possible decisions for the business.
In addition, the owners are requesting that you provide them with some suggestions on simple internal controls they can integrate to ensure protection of company assets, and accuracy in the company’s financial data. The owners are also considering acquiring more long-term/fixed assets, such as vehicles, equipment, buildings, and so on. They would like your input on the different options available for depreciation of these costs. Adding sales of product is also a consideration for expansion. The owners want to know what accounting considerations will be involved with this change.
Summary: Write a summary of what the financial statements indicate about the companys financial health and performance.
Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user.
Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data.
Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.
Analysis: Explain the companys cash position, its net income as a percentage of sales, and its current liabilities to current assets position.
Results: Discuss the results regarding profitability of the first month of operations.
Consider how well the company is positioned to meet current liabilities.
Be sure to include the percentage of revenues that result in profit/net income and the current ratio when discussing profitability and liquidity based on the recorded months results.
Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profit/net income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)?
Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of their financial data as they anticipate further growth.
Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.
Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet.
Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined.
Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising.
Consider how accounting will change with the addition of merchandise inventory.
ACC 201 Accounting Data Appendix
The following events occurred in March:
March 1: Owner borrowed $125,000 to fund/start the business. The loan term is 5 years.
March 1: Owner paid $250 to the county for a business license.
March 2: Owner signed lease on office space; paying first (March 20XX) and last months rent of $950 per month.
March 5: Owner contributed office furniture valued at $2,750 and cash in the amount of $15,000 to the business.
March 6: Owner performed service for client in the amount of $650. Customer paid in cash.
March 8: Owner purchased advertising services on account in the amount of $500.
March 10: Owner provided services to client on account, in the amount of $1,725.
March 15: Owner paid business insurance in the amount of $750.
March 20: The owner received first utility bill in the amount of $135, due in April.
March 20: Office copier required maintenance; owner paid $95.00 for copier servicing.
March 22: Owner withdrew $500 cash for personal use.
March 25: Owner paid $215 for office supplies.
March 25: Owner provided service to client in the amount of $350. Client paid at time of service.
March 30: Owner paid balance due for advertising expense purchase on March 8.
March 30: Received payment from customer for March 10 invoice in the amount of $1,725.
March 31: Last day of pay period; owner owes part-time worker $275 for the March 16 through March 31 pay period. This will be paid on April 5.
March 31: Provided service for client on account in the amount of $3,500.
March 31: Record depreciation of the office furniture at $45.83.
image1.png Summary Report: Financial Statements 2
[
Note: To complete this template, replace the bracketed text with your own content. Remove this note before you submit your report.]
Summary Report: Financial Statements
[Your Name]
Southern New Hampshire University
Summary Report: Financial Statements 1
Introduction
[In this section, include the purpose of the report. Describe the kind of information these financial statements provide to various aspects of the business.]
Process
[In this section you will discuss the process you used to generate accurate financial statement results for the business owner from the list of business transactions provided. Explain what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.]
Financial Statement Analysis
[This section should center on your analysis of the financial performance of the company based on the statements you prepared. Discuss key points on your observations of results: Is the company operating profitably (what percent of revenues result in profit/net income)? How well poised are they to meet liabilities (discuss liquidity and current ratio)?.]
Internal Controls
[Provide suggestions for a simple system of internal controls to assist the owners in protecting assets and ensuring accuracy in financial data. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.]
Looking to the Future
[In response to the owners request for additional information and support for future growth, discuss accounting considerations associated with the acquisition of additional long term/fixed assets, and the addition of merchandise inventory. How will the company account for the costs of long-term assets? How will the method of depreciation be determined? (Expand on 2 different methods of depreciation to demonstrate ideal application). How does accounting change with the addition of merchandise inventory? How will it be determined which inventory costing method to apply? (Discuss how the FIFO, LIFO, and Average methods differ and provide examples of the types of merchandising scenarios that would be ideally applicable in each case.)] Chart of Accounts
This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you.
Asset Accounts
Liability Accounts
Equity Accounts
Acct #
Acct #
Acct #
Cash
101
Notes Payable
201
Owner’s Capital
301
Accounts Receivable
102
Accounts Payable
202
Owner Draws
302
Prepaid Rent
103
Wages Payable
203
Office Furniture
104
Office Supplies
105
Accumulated Depreciation (contra asset)
106
Revenue Accounts
Acct #
Service Revenue
401
Expense Accounts
Acct #
Rent expense
501
Business License Expense
502
Insurance Expense
503
Repairs and Maintenance
504
Advertising Expense
506
Wages Expense
507
Utilities Expense
508
Depreciation Expense
509
Cash
Baking Supplies
Prepaid Rent
Prepaid Insurance
Baking Equipment
Office Supplies
Accounts Receivable
Accumulated Depreciation
Merchandise Inventory
Notes Payable
Accounts Payable
Wages Payable
Interest Payable
Common Stock
Dividends
Bakery Sales
Merchandise Sales
Baking Supplies Expense
Rent Expense
Insurance Expense
Misc. Expense
Business License Expense
Advertising Expense
Wages Expense
Telephone Expense
Interest Expense
Depreciation Expense
Office Supplies Expense
Cost of Goods Sold
General Journal
A Company
General Journal Entries
Journal Entry Tips
The debited account is recorded first, credited account recorded second.
Debits and credits must always equal!
Date
Accounts
Debit
Credit
There can be compound entries in which two accounts receive a debt to an equivalent credited amount to one account.
1-Mar
Cash
125,000.00
Be sure to use your chart of accounts (the first page of this workbook).
Note Payable
125,000.00
Each account you will record to is already listed and organized by classification of the account.
1-Mar
Business License
250.00
Cash
250.00
2-Mar
Rent Expense
950.00
Prepaid Rent
950.00
Cash
1,900.00
5-Mar
Office Furniture
2,750.00
Cash
15,000.00
Owners Capital
17,750.00
6-Mar
Cash
650.00
Service Revenue
650.00
8-Mar
Advertising Expence
500.00
Advertising Payable
500.00
10-Mar
Accounts Receivable
1,725.00
Service Revenue
1,725.00
15-Mar
Insurance Expense
750.00
Cash
750.00
20-Mar
Ultilities Expense
135.00
Cash
135.00
20-Mar
Maintenance Expense
95.00
Cash
95.00
22-Mar
Owners Draws
500.00
Cash
500.00
25-Mar
Office Supplies
215.00
Cash
215.00
25-Mar
Cash
350.00
Service Revenue
350.00
30-Mar
Advertising Expense
500.00
Cash
500.00
30-Mar
Accounts Receivable
1,725.00
Service Revenue
1,725.00
31-Mar
Wages Expense
275.00
Wages Payable
275.00
31-Mar
Accounts Receivable
3,500.00
Service Revenue
3,500.00
31-Mar
Depreciation Expense
45.83
Accumulated Depreciation
45.83
Total
155,865.83
155,865.83
If Red, this means your debits and credits do not equal. Be sure to review for errors.
Ledger Accounts
Assets
Liabilities
Equity
Revenue
Expenses
Cash
Notes Payable
Owner’s Capital
Service Revenue
Rent Expense
1-Mar
$ 125,000.00
250
1-Mar
$ 125,000.00
1-Mar
$ 17,750.00
5-Mar
$ 650.00
6-Mar
2-Mar
$ 1,900.00
5-Mar
$ 15,000.00
$ 950.00
2-Mar
$ 1,725.00
10-Mar
6-Mar
$ 650.00
$ 750.00
15-Mar
$ 350.00
25-Mar
25-Mar
$ 350.00
$ 95.00
20-Mar
$ 3,500.00
31-Mar
30-Mar
$ 1,725.00
$ 500.00
22-Mar
$ 215.00
25-Mar
$ 500.00
30-Mar
$ 142,725.00
$ 3,260.00
$ – 0
$ 125,000.00
$ – 0
$ 17,750.00
$ – 0
$ 6,225.00
$ 1,900.00
$ – 0
$ 139,465.00
$ 125,000.00
$ 17,750.00
$ 6,225.00
$ 1,900.00
Accounts Rec.
Accounts Payable
Owner Draws
Business License Expense
10-Mar
$ 1,725.00
$ 1,725.00
30-Mar
30-Mar
$ 500.00
135
20-Mar
22-Mar
$ 500.00
1-Mar
$ 250.00
31-Mar
$ 3,500.00
$ 500.00
8-Mar
$ 5,225.00
$ 1,725.00
$ 500.00
$ 635.00
$ 500.00
$ – 0
$ 250.00
$ – 0
$ 3,500.00
$ 135.00
$ 500.00
$ 250.00
Prepaid Rent
Wages Payable
Insurance Expense
$ 950.00
2-Mar
$ 275.00
31-Mar
Posting to the ledger/t accounts
15-Mar
$ 750.00
Don’t overthink it!
You are just posting each debit and credit from the journal entries to the account you identified in the entry.
These accounts are set to calculate your balances for you.
Please be careful not to delete the running totals as those will calculate the ending balance.
The ending balance will transfer to the Trial Balance sheet.
If you have posted all entries and your trial balance is not in balance (total debits = total credits),
$ – 0
$ 950.00
$ – 0
$ 275.00
this means that there is an error.
$ 750.00
$ – 0
$ (950.00)
$ 275.00
$ 750.00
Office Furniture
Repairs & Maint.
5-Mar
$ 2,750.00
20-Mar
$ 95.00
$ 2,750.00
$ – 0
$ 95.00
$ – 0
$ 2,750.00
$ 95.00
Office Supplies
Advertising Expense
25-Mar
$ 215.00
30-Mar
$ 500.00
$ 215.00
$ – 0
$ 500.00
$ – 0
$ 215.00
$ 500.00
Accumulated Depreciation
Wages Expense
26-Nov
$ 45.83
31-Mar
$ 275.00
$ 45.83
$ – 0
$ 275.00
$ – 0
$ 45.83
$ 275.00
Utilities Expense
20-Mar
$ 135.00
$ 135.00
$ – 0
$ 135.00
Depreciation Expense
31-Mar
$ 45.83
$ 45.83
$ – 0
$ 45.83
Trial Balance
Trial Balance
As of 03/31/20XX
Unadjusted trial balance
Account
Debit
Credit
Trial Balance
Cash
139,465.00
Balances from the t accounts will autofill your trial balance.
Accounts Receivable
3,500.00
If total debits do not equal total credits in the trial balance, you know you have an error.
Prepaid Rent
(950.00)
These are the balances that will be used to prepare the financial statements.
Office Furniture
2,750.00
Be sure to implement feedback provided by your instructor for this Milestone One submission!
Office Supplies
215.00
Accumulated Depreciation
45.83
Notes Payable
125,000.00
Accounts Payable
135.00
Wages Payable
275.00
Owner’s Capital
17,750.00
Owner Draws
500.00
Service Revenue
6,225.00
Rent Expense
1,900.00
Business License Expense
250.00
Depreciation Expense
45.83
Insurance Expense
750.00
Repairs and Maintenance Expense
95.00
Advertising Expense
500.00
Wages Expense
275.00
Utilities Expense
135.00
Retained Earnings
Total:
149,430.83
149,430.83
Debits should equal credits
`
Income Statement
A Company
Income Statement
For Month ending 3/31/20XX
Revenues
$ 6,225.00
Total Revenues
$ 6,225.00
Operating Expenses:
$ 250.00
$ 950.00
$ 500.00
$ 750.00
$ 135.00
$ 95.00
$ 275.00
$ 45.83
Total Operating Expenses:
3,000.83
Net Income
3,224.17
Statement of Stockholder Equity
Company Name
Statement of Owner’s Equity
Period Ending 03/31/20XX
Beginning Capital on 3/01/20XX
$ – 0
Increases to capital
Net income/loss:
$ 3,224.17
Owner Contributions
$ 17,750.00
Subtotal:
$ 20,974.17
Decreases to capital
Owner Draws
$ 500.00
Ending Equity as of 03/31/20XX
$ 20,474.17
Balance Sheet
A Company
Balance Sheet
As of March 31, 20XX
Assets
Liabilities and Owners’ Equity
Current Assets:
Current Liabilities:
Cash
139,465.00
Accounts payable
135.00
Accounts Receivable
3,500.00
Wages Payable
275.00
Office Supplies
215.00
Total Current Liabilities
410.00
Long Term Liabilities:
Cash
125,000.00
Total Current Assets
143,180.00
Total Long Term Liabilities:
125,000.00
Total Liabilities:
125,410.00
Owner’s Equity
Capital
20,474.17
Non-Current Assets:
Cash
2,750.00
Cash
(45.83)
Total Equity
20,474.17
Total Non Current/Fixed Assets
2,704.17
Total Assets:
145,884.17
Total Liabilities & Equity
145,884.17
<== Total Assets on the left should equal Liabilities + Owner's Equity on the right.
Closing Entries
A Company
Closing Entries
Month ending 03/31/20XX
Date
Accounts
Debit
Credit
31-Mar
Revenue
6,225.00
Income Summary
6,225.00
Close revenues
31-Mar
Income Summary
3,224.17
Business License
250.00
Rent Expense
950.00
Advertising
500.00
Insurance
750.00
Utilities
135.00
Maintanence
95.00
Wages
275.00
DEP Expense
45.83
Close Expenses
31-Mar
Capital
20,474.17
20,474.17
Close Income Summary
31-Mar
Close Dividends
29,923.34
29,700.00
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