Cumulative effects of the cash transactions


Response to the following problem:

Assume that Joy Hospital on May 1 had $29,000 of assets, $12,000 of liabilities, and $17,000 of net assets. Subsequently, the following transactions were completed:

1. The hospital borrowed $2,500 from a local bank.

2. The hospital repaid $1,000 of the bank loan (disregard interest).

3. Supplies costing $1,800 were purchased on account and placed in inventory.

4. A new item of equipment was purchased for $4,600 cash.

5. The hospital paid $800 on its accounts payable.

6. Supplies previously purchased for $700 were sold to patients for $960 cash.

7. Patients' accounts were charged for $1,770 of hospital services rendered to them.

8. Cash collections on patients' accounts amounted to $1,150.

Required: Taking into account the cumulative effects of the eight transactions and the May 1 balances, what are Joy Hospital's (1) total assets, (2) total liabilities, and (3) total net assets?

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Financial Accounting: Cumulative effects of the cash transactions
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