Transaction #1 (May 4, 2019) - the hospital signed a purchase order for a $2,500 supply purchase, which will be delivered/completed in mid-June. Transaction #2 (May 15, 2019) - the hospital provided $15,000 in patient care services and billed patients' insurance plans. Transaction #3 (May 25, 2019) - the hospital took out a loan for $4,000 to meet future, unexpected payroll obligations.
First using cash accounting, and then accrual accounting, discuss what the balances of each account will be on May 31, 2019 at Hippie Hospital for the financial period below, taking into consideration the transactions listed. Then, discuss why/how you arrived at your answer for each ending account balance.
Beginning account balances for May 2019:
Assets = $1,400,000
Liabilities = $500,000
Net Assets = $890,900
Revenue = $25,000
Expenses = $15,900
Transaction #1 (May 4, 2019) - the hospital signed a purchase order for a $2,500 supply purchase, which will be delivered/completed in mid-June.
Transaction #2 (May 15, 2019) - the hospital provided $15,000 in patient care services and billed patients' insurance plans.
Transaction #3 (May 25, 2019) - the hospital took out a loan for $4,000 to meet future, unexpected payroll obligations.
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