Cure All Hospital (CAH) started 2017 with the balance sheet below, which is the

Question

Cure All Hospital (CAH) started 2017 with the balance sheet below, which is the balance sheet for 2016. During 2017, CAH reported fourteen financial transactions as also shown below. Create a transactions worksheet in an Excel file, which records all the transactions.

Transaction 1: CAH purchased a two-year fire insurance for $300 on January 28. CAH paid $300 in cash.

Transaction 2: CAH paid back $7,000 of what it owed at the beginning of 2017 in cash on February 1.

Transaction 3: CAH purchased supply items to prepare for its upcoming fundraising event scheduled at the end of the first quarter. The supply items have been delivered and CAH paid $3,000 in cash on March 14.

Transaction 4: CAH planned to have another fundraising event in the second quarter and purchased another batch of supply items for $6,000 on credit. The supply items were delivered on April 2.

Transaction 5: CAH managed to expedite the collection of uncollected revenues on May 15. CAH successfully collected $11,000 of accounts receivable.

Transaction 6a: On June 10, CAH provided treatment services and earned $76,000 of patient revenues. CAH collected $20,000 in cash and the remaining balance has not yet been paid.

Transaction 6b: For Transaction 6a, CAH used $2,000 of inventory asset.

Transaction 7: CAH ordered a new X-ray machine for $250,000 on June 30. The machine has not yet been delivered and the payment has not yet been made.

Transaction 8: CAH paid $60,000 of wages payable it owed in 2016 on August 15. CAH also reported $35,000 labor expense in 2017. CAH decided to pay $25,000 of the labor expense in 2018.

Transaction 9: CAH collected $5,000 of accounts receivable on September 24.

Transaction 10: CAH made a mortgage payment of $25,000. The payment reduced the mortgage loan balance of $8,000 while the rest was interest payment for the mortgage loan on November 30.

Transaction 11: CAH made a year-end adjustment for the fire insurance.

Transaction 12: CAH owed its administrative staff $33,000 that CAH will pay in 2018.

Transaction 13: CAH made a year-end depreciation adjustment for its plant and equipment. The annual depreciation expense was $11,000.

ASSETS Current Assets Cash Accounts Receivable Invento Prepaid Insurance 96,000 12,000 6,000 100 LIABILITIES AND NET ASSETS Liabilities Current Liabilities Accounts Payable Wages Payable Total Current Liabilities S 8,100 78 86 Total Current Assets Long-Term Liabilities 114 100 Mortgage Payable Total Long-Term Liabilities Total Liabilities Net Assets Unrestricted Temporarily Restricted 211,000 211,000 297,100 141,000 Long-Term Assets Fixed Assets Property Equipment, Net Total Long-Term Assets $62,000 $70,000 273,000 and 456,000 $456,000 $570,100Assets Permanently Restricted Total Net Assets Total Liabilities and Net Total Assets $570,100

Explanation / Answer

Transaction worksheet Balances as on December 31, 2016 Transaction made during the year Unadjusted trial balance Adjustment Adjusted trial balance Debit Credit Debit Credit Debit Credit Debit Credit Cash 96000 36000 123300 8700 8700 0 Accounts Receviable 12000 56000 16000 52000 52000 0 Inventory 6000 2000 4000 4000 0 Prepaid Insurance 100 300 400 250 400 250 Property, Plant & Equipment-Net 456000 456000 11000 456000 11000 Accounts Payable 8100 7000 6000 7100 0 7100 Wages payable 78000 60000 0 18000 7000 0 25000 Salaries Payable 33000 0 33000 Mortgage payable 211000 8000 203000 0 203000 Net Assets 273000 273000 0 273000 Revenue from services 76000 76000 0 76000 Supplies expenses 9000 9000 9000 0 Insurance expense 250 250 0 Interest expense 17000 17000 17000 0 Wages expense 28000 28000 7000 35000 0 Salaries expense 33000 33000 0 Depreciation expense 11000 11000 0 Cost of goods sold 2000 2000 2000 0 Total 570100 570100 223300 223300 577100 577100 51250 51250 628350 628350

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