pg 724-725
1. Mindy Feldkamp and her two colleagues, Oscar Lopez and Lori Melton, are personal trainers at an upscale health spa/resort in Tampa, Florida. They want to start a health club that specializes in health plans for people in the 50 + age range. The growing population in this age range and strong consumer interest in the health benefits of physical activity have convinced them they can profitably operate their own club. In addition to many other decisions, they need to determine what type of business organization they want. Oscar believes there are more advantages to the corporate form than a partnership, but he hasn't yet convinced Mindy and Lori. They have come to you, a small business consulting specialist, seeking information and advice regarding the choice of starting a partnership versus a corporation.
a) Prepare a memo (dated May 26, 2009) that describes the advantages and disadvantages of both partnerships and corporations. Advise Mindy, Oscar and Lori regarding which organizational form you believe would better serve their purposes. Make sure to include reasons supporting your advice.
AND SO ON
All Parts 1 to 5
Click here for the solution: Mindy Feldkamp and her two colleagues, Oscar Lopez and Lori Melton,
Showing posts with label health. Show all posts
Showing posts with label health. Show all posts
Wednesday, September 16, 2015
Sunday, September 13, 2015
Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011
E 17-27 Postretirement benefits; components of postretirement benefit expense
Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011:
Service cost 124
Accumulated postretirement benefit obligation, Jan 1 700
Prior service cost AOCI 50
Prior service cost AOCI none
Net gain AOCI (2011 amort, 1) 91
retiree benefits paid (end of year) 87
contribution to health care benefit fund (end of year) 185
Discount rate 7%
Required:
1. Determine the postretirement benefit expense for 2011.
2. Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.
Click here for the solution: Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011
Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011:
Service cost 124
Accumulated postretirement benefit obligation, Jan 1 700
Prior service cost AOCI 50
Prior service cost AOCI none
Net gain AOCI (2011 amort, 1) 91
retiree benefits paid (end of year) 87
contribution to health care benefit fund (end of year) 185
Discount rate 7%
Required:
1. Determine the postretirement benefit expense for 2011.
2. Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2011.
Click here for the solution: Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2011
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2011, following plan-related data were available
Accumulated postretirement benefit obligation 130
Fair value of plan assets none
Average remaining service period to retirement 25 years (same in previous 10 yrs)
Average remaining service period to full eligibility 20 years (same in previous 10 yrs)
On January 1, 2011, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases service cost for 2011 is $34 million. The interest rate is 8%.
Requirements
1. Calculate the postretirement benefit expense for 2011.
2. Prepare the journal entry to record the expense.
Click here for the solution: Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Accumulated postretirement benefit obligation 130
Fair value of plan assets none
Average remaining service period to retirement 25 years (same in previous 10 yrs)
Average remaining service period to full eligibility 20 years (same in previous 10 yrs)
On January 1, 2011, Gorky-Park amends the plan to provide certain dental benefits in addition to previously provided medical benefits. The actuary determines that the cost of making the amendment retroactive increases service cost for 2011 is $34 million. The interest rate is 8%.
Requirements
1. Calculate the postretirement benefit expense for 2011.
2. Prepare the journal entry to record the expense.
Click here for the solution: Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service
Friday, July 31, 2015
Highline Hospital provides a wide range of health services in its community
7-44 Cash Budgeting for a Hospital
Highline Hospital provides a wide range of health services in its community. Highline’s board of directors has authorized the following capital expenditures:
Intra-aortic balloon pump $1,400,000
Computed tomographic scanner 850,000
X-ray equipment 550,000
Laboratory equipment 1,200,000
Total $4,000,000
The expenditures are planned for October 1, 20X7, and the board wishes to know the amount of borrowing, if any, necessary on that date. Rebecca Singer, hospital controller, has gathered the following information to be used in preparing an analysis of future cash flows. Billings, made in the month of service, for 20X7 are shown below, with actual amounts for January through June and estimated amounts for July through December:
Month Actual Amount
January $5,300,000
February 5,300,000
March 5,400,000
April 5,400,000
May 6,000,000
June 6,000,000
July (estimated) 5,800,000
August (estimated) 6,000,000
September (estimated) 6,600,000
October (estimated) 6,800,000
November (estimated) 7,000,000
December (estimated) 6,600,000
Ninety percent of Highline billings are made to third parties, such as BlueCross, federal or state governments, and private insurance companies. The remaining 10% of the billings are made directly to patients. Historical patterns of billing collections are
Third-Party Billings Direct-Patient Billings
Month of service 20% 10%
Month following service 50 40
Second month following service 20 40
Uncollectible 10 10
Singer expects the same billing and collection patterns that have been experienced during the first six months of 20X7 to continue during the last six months of the year. The following schedule presents the purchases that have been made during the past three months and the planned purchases for the last six months of 20X7.
Month Amount
April $1,300,000
May 1,450,000
June 1,450,000
July 1,500,000
August 1,800,000
September 2,200,000
October 2,350,000
November 2,700,000
December 2,100,000
All purchases are made on account, and accounts payable are remitted in the month following the purchase.
• Salaries for each month during the remainder of 20X7 are expected to be $1,800,000 per month plus 20% of that month’s billings. Salaries are paid in the month of service.
• Highline’s monthly depreciation charges are $150,000.
• Highline incurs interest expenses of $180,000 per month and makes interest payments of $540,000 on the last day of each calendar quarter.
• Endowment fund income is expected to continue to total $210,000 per month.
• Highline has a cash balance of $350,000 on July 1, 20X7, and has a policy of maintaining a minimum end-of-month cash balance of 10% of the current month’s purchases.
• Highline Hospital employs a calendar-year reporting period.
1. Prepare a schedule of budgeted cash receipts by month for the third quarter of 20X7.
2. Prepare a schedule of budgeted cash disbursements by month for the third quarter of 20X7.
3. Determine the amount of borrowing, if any, necessary on October 1, 20X7, to acquire the capital items totaling $4,000,000.
Click here for the solution: Highline Hospital provides a wide range of health services in its community
Highline Hospital provides a wide range of health services in its community. Highline’s board of directors has authorized the following capital expenditures:
Intra-aortic balloon pump $1,400,000
Computed tomographic scanner 850,000
X-ray equipment 550,000
Laboratory equipment 1,200,000
Total $4,000,000
The expenditures are planned for October 1, 20X7, and the board wishes to know the amount of borrowing, if any, necessary on that date. Rebecca Singer, hospital controller, has gathered the following information to be used in preparing an analysis of future cash flows. Billings, made in the month of service, for 20X7 are shown below, with actual amounts for January through June and estimated amounts for July through December:
Month Actual Amount
January $5,300,000
February 5,300,000
March 5,400,000
April 5,400,000
May 6,000,000
June 6,000,000
July (estimated) 5,800,000
August (estimated) 6,000,000
September (estimated) 6,600,000
October (estimated) 6,800,000
November (estimated) 7,000,000
December (estimated) 6,600,000
Ninety percent of Highline billings are made to third parties, such as BlueCross, federal or state governments, and private insurance companies. The remaining 10% of the billings are made directly to patients. Historical patterns of billing collections are
Third-Party Billings Direct-Patient Billings
Month of service 20% 10%
Month following service 50 40
Second month following service 20 40
Uncollectible 10 10
Singer expects the same billing and collection patterns that have been experienced during the first six months of 20X7 to continue during the last six months of the year. The following schedule presents the purchases that have been made during the past three months and the planned purchases for the last six months of 20X7.
Month Amount
April $1,300,000
May 1,450,000
June 1,450,000
July 1,500,000
August 1,800,000
September 2,200,000
October 2,350,000
November 2,700,000
December 2,100,000
All purchases are made on account, and accounts payable are remitted in the month following the purchase.
• Salaries for each month during the remainder of 20X7 are expected to be $1,800,000 per month plus 20% of that month’s billings. Salaries are paid in the month of service.
• Highline’s monthly depreciation charges are $150,000.
• Highline incurs interest expenses of $180,000 per month and makes interest payments of $540,000 on the last day of each calendar quarter.
• Endowment fund income is expected to continue to total $210,000 per month.
• Highline has a cash balance of $350,000 on July 1, 20X7, and has a policy of maintaining a minimum end-of-month cash balance of 10% of the current month’s purchases.
• Highline Hospital employs a calendar-year reporting period.
1. Prepare a schedule of budgeted cash receipts by month for the third quarter of 20X7.
2. Prepare a schedule of budgeted cash disbursements by month for the third quarter of 20X7.
3. Determine the amount of borrowing, if any, necessary on October 1, 20X7, to acquire the capital items totaling $4,000,000.
Click here for the solution: Highline Hospital provides a wide range of health services in its community
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