1. The Purtell Animal Welfare Society (PAWS) boards stray animals. They also provide veterinary checkups to ensure the health of the strays. In 2011, PAWS expected to board 400 animals, spend 3.25 hours of veterinarian time per animal, and pay the veterinarians $105 per hour, for an annual veterinary expense of $136,500. In actuality, PAWS boarded 450 animals, vets spent 4 hours per animal and were paid $75 per hour.
a. What was PAWS total veterinary expense? What portion of the total veterinary expense was due to volume? What portion of the total veterinary expense was due to quantity? What portion of the total veterinary expense was due to price? Indicate whether each variance is favorable or unfavorable. Please complete the answer in an Excel spreadsheet.
4. During 2013, The Y, a nonprofit organization, bought and used containers of pool chemicals as shown in the table below. Under LIFO what was the Y's pool-chemical expense for the fiscal year 2013? The Y uses the Periodic method of inventory and takes a count of the inventory on 12/31/13. Please show the answer in an Excel spreadsheet.
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Units Bought
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Purchase Price
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Units Used
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January 1
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50
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$100
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|
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February 15
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90
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$80
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|
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Used Through June 30
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120
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August 15
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90
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$90
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|
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October 30
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120
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$80
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Used through December 31
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160
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Total
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350
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280
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5. Record the transactions below for the Y, a nonprofit organization that uses accrual accounting. Be sure to identify the balance sheet categories and accounts used in each transaction. Please show your work in an Excel spreadsheet.
b. On January 1, 2013, the Y acquired gym equipment costing $200,000 for cash. The equipment has an expected life of 10 years with a residual value of 20 %. The Y uses straight-line depreciation.
c. On January 1, 2013, the Y sent membership-renewal notices to all of its existing members. If all of the members renewed, the Y would receive $600,000. Historically, 15% of members do not renew and will not pay the bill. The Y recognizes all membership revenue when members are billed.
d. On April 1, 2013, the Y paid $70,000 for expenses related to its annual fund-raising drive.
e. On April 1, 2013, the Y conducted its fundraising drive and received $150,000 in cash donations.
f. On July 12, 2013, the Y purchased $125,000 worth of supplies and paid its suppliers $175,000.
g. On August 20, 2013, the Y collected $450,000 that was owed to them for fiscal year 2008 membership renewals.
h. Through December 31st, the Y used $130,000 worth of supplies.
i. Through December 31, 2013, the Y used $320,000 of labor. During the year, the Y paid $325,000 of then wages due to its workers.
6. A not-for-profit hospital's fiscal year ends on December 31st. On January 1st, 2013, the hospital took out a bank loan for $750,000. The loan has an annual interest rate of 6% and requires that the hospital repay the loan principal in 15 equal payments mad annually on the last day of the fiscal year. Interest is paid separately. Loan repayments began on the last day of FY 2010. Assuming the bank loan is the hospital's only debt, what are the current [A] and long-term portions [B] of notes payable that would be shown on the balance sheet as of the last day of FY 2014? Please show work in an Excel spreadsheet.
9. All questions in this section reference the FY 2010-11 financial statements of McLeod Health. For the following questions, please select the appropriate ratio from the following list, and make sure to include units of analysis in your answers when appropriate (days, $, %, etc.). Please show work in an Excel spreadsheet
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Cash-Flow Coverage
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=
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Net Cash provided by Operating + Interest Expense
Interest Expense + Debt Payments
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Current Ratio
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=
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Current Assets
Current Liabilities
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Debt to Equity
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=
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Total Liabilities
Total Net Assets
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Receivables Turnover
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=
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Unrestricted gains and other support
Total Receivables
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Return on Net Assets
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=
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Change in Net Assets
Total Net Assets
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Answer the following questions in an Excel spreadsheet.
1. As Finance Director for McLeod Health, you want to calculate the organization's profitability.
a. Which ratio will you use?
b. What is the value of this ratio for FY 2011? Show your work, and highlight the answer.
c. Has McLeod's profitability improved or deteriorated since FY 2010?
2. Now, you want to determine whether McLeod? Liquidity is sufficient.
a. Which ratio measures liquidity?
3. A creditor will evaluate the extent to which McLeod is leveraged.
a. Which ratio will the creditor use?
b. What is the value of this ratio for FY 2011? Show your work, and highlight the answer.
c. Does the ratio you calculated in part (b) compare favorably or unfavorably to the rule of thumb for this ratio? Write "none" if there is no rule of thumb.
4. The Operations Manager would like to evaluate how efficiently McLeod collects on amounts that are owed to the organization.
a. Which ratio should the Operations Manager use?
b. What is the value of this ratio for FY 2011? Show your work, and highlight the answer.
c. Does the ratio you calculated in part (b) compare favorably or unfavorably to the rule of thumb for this ratio? Write "none" if there is no rule of thumb.
5. Finally, you want to calculate McLeod's ability to make debt service payments.
a. Which ratio should you use?
b. What is the value of this ratio for FY 2011? Show your work, and highlight the answer.
c. Does the ratio you calculated in part (b) compare favorably or unfavorably to the rule of thumb for this ratio? Write "none" if there is no rule of thumb.