Part 1:
An ambulatory clinic, structured as a physicians’ partnership, has 7 responsibility centers: Administration, Administrational Support, Facilities Management, Environmental Support, Imaging, Clinical Services, and Surgical/Invasive Services. Last year’s balance sheet and income statement are shown below. Being structured as a for-profit partnership, there are some minor differences in the financial statements from the corporate formats used in class. For example, the equity section of the balance sheet is comprised primarily of 2 accounts: the capital and current accounts. Typically, each partner has their contributed capital listed in the capital account and their share of the company’s accumulated profits (retained earnings) listed in their current accounts.
AMBULATORY CLINIC PARTNERSHIP
BALANCE SHEET, December 31, 2013
ASSETS
Cash and equivalents $ 200,000
Net accounts receivables 420,000
Supplies 150,000
Pre-paid expenses 180,000
Other 150,000
Total Current Assets $ 1,100,000
PP&E $ 2,550,000
Accumulated depreciation 550,000
Net Fixed Assets $2,000,000
Goodwill 400,000
Other Intangibles 100,000
TOTAL ASSETS $ 2,500,000
LIABILITIES
Accounts payable $ 180,000
Salaries payable 160,000
Taxes payable 30,000
Current portion of L-T debt 100,000
Notes payable 60,000
Unearned revenues 60,000
Total Current Liabilities $ 590,000
Debentures, less current portion 500,000
Mortgages, less current portion 600,000
Total Long-term Liabilities $ 1,100,000
EQUITY
Capital account (total) 410,000
Current account (total) 400,000
Total Equity $ 810,000
TOTAL LIABILITIES & EQUITY $ 2,500,000
AMBULATORY CLINIC PARTNERSHIP
INCOME STATEMENT, Year Ended December 31, 2013
Gross Patient Revenue $4,500,000
Deductions & Bad debt 850,000
Net Patient Revenue $3,650,000
Interest Revenue 150,000
Total Net Revenues $3,800,000
Operating Expenses
Salaries/wages expense $2,050,000
Lease expense …