CUNY Lehman College SLO Health Care Inc Financial Statements Worksheet

Question Description

Financial Statements

SLO Health Care Inc. is owned and operated by Morgan Denby, the sole stockholder.

During January 20Y6, San Mateo Health Care entered into the following transactions:

Jan. 1		Received $13,500 from Glenn Company as rent for the use of a vacant office in SLO Health Cares building. Glenn paid the rent nine months in advance.
1		Paid $3,000 for a one-year general insurance business policy.
6		Purchased supplies of $900 on account.
9		Collected $16,000 for services provided to customers on account.
11		Paid creditors $2,500 on account.
18		Invested an additional $5,000 in the business in exchange for common stock.
20		Billed patients $26,000 for services provided on account.
25		Received $7,500 for services provided to customers who paid cash.
30		Paid expenses as follows: wages, $15,500 utilities, $4,250 rent on medical equipment, $2,650 interest, $100 and miscellaneous, $1,500.
30		Paid dividends of $4,000 to stockholder (Dr. Denby).

Adjustment data for SLO Health Care Inc. for January are as follows:

Insurance expired, $450.
Supplies on hand on January 31, $600.
Depreciation on building, $1,150.
Unearned rent revenue earned, $1,500.
Wages owed employees but not paid, $1,450.
Services provided but not billed to patients, $2,500.

Presented in the integrated financial statement format are after-adjustment balances for January.

Instructions:

Prepare an income statement for January.

SLO HEALTH CARE INC.
Income Statement
For the Month Ended January 31, 20Y6
Fees earned		$
Operating expenses:
Wages expense	$
Utilities expense
Rent expense
Depreciation expense
Supplies expense
Insurance expense
Interest expense
Miscellaneous expense
Total operating expenses
Operating income		$
Other revenue:
Rent revenue
Net income		$

Feedback

An income statement lists revenues and expenses. When revenues are more than the expenses, the difference is net income.

Prepare a statement of stockholders’ equity for January. For those boxes in which no entry is required, leave the box blank.

SLO HEALTH CARE INC.
Statement of Stockholders’ Equity
For the Month Ended January 31, 20Y6
	Common Stock	Retained Earnings	Total
Balances, Jan. 1, 20Y6	$	$	$
Issued common stock
Net income
Dividends
Balances, Jan. 31, 20Y6	$	$	$

Feedback

In the statement of stockholders’ equity, the balance of retained earnings is determined by using the equation:
Beginning Retained Earnings + Net Income Dividends = Ending Retained Earnings
The balance of common stock is added to the balance of retained earnings to determine the total balance of stockholders’ equity.

Prepare a classified balance sheet for January. The note payable is due in ten years.

SLO HEALTH CARE INC.
Balance Sheet
January 31, 20Y6
Assets
Current assets:
Cash		$
Accounts receivable
Prepaid insurance
Supplies
Total current assets			$
Property, plant, and equipment:
Building	$
Less accumulated depreciation		$
Land
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
Accounts payable		$
Unearned rent
Wages payable
Total current liabilities			$
Long-term liabilities:
Notes payable (due in ten years)
Total liabilities			$
Stockholders’ Equity
Common stock		$
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity			$

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