Homework
NNS Hospitals Ltd. is a publicly owned company which owns a chain of hospitals. The Balance Sheet of NNS as of 31/3/2015 is given below:
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Liabilities and Owners' Equity
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Accounts Payable
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120,000
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Salaries Payable
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10,000
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Provision for Taxes (2013-14)
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90,000
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Provision for Taxes (2014-15)
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100,000
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8% Bank Loan
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160,000
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Share Capital
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400,000
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Share Premium
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200,000
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Retained Earnings
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20,000
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TOTAL
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1,100,000
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Assets
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Cash
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80,000
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Inventories of Medical Supplies
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120,000
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Accounts Receivable
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100,000
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Less: Allowance for Doubtful Debts
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-5,000
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95,000
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Advance Taxes Paid (2013-14)
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95,000
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Advance Taxes Paid (2014-15)
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100,000
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Prepaid Insurance
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20,000
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Investments in 10% Government Bonds
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200,000
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Land
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150,000
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Building
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200,000
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Less: Accumulated Depreciation
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-20,000
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180,000
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Equipment
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100,000
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Less: Accumulated Depreciation
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-40,000
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60,000
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TOTAL
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1,100,000
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Majority of the cash payments and receipts made during the year are given below:
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Cash Receipts
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Cash Payments
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Total Cash Collected from Patients
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700,000
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Cash Paid for Staff Salaries
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110,000
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Interest Received on Govt. Bonds
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20,000
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Cash Paid for Accounts Payable
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300,000
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Sale of Equipment (31/12/2015)
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15,000
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Cash Paid for Utilities
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50,000
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Dividends received
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5,000
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Loan Repaid (31/3/2016)
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20,000
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Doctors Honorarium
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140,000
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Equipment Purchase (30/9/2015)
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30,000
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Advance Tax Paid
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100,000
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Dividends paid
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50,000
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Investment in Stock of ND Co.
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20,000
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Additional Details:
i. NNS provides services to certain patients on a credit basis. During the current financial year, $300,000 worth of services was provided to such patients on a credit basis and $310,000 was collected from such patients. Due to poor financial condition of certain patients, $6,000 was written-off as bad debts in March 2016. $2,000 worth of previously written-off amounts was collected in January 2016. The firm wishes to maintain a balance of 5% of year-end Accounts Receivable as an allowance for doubtful debts.
ii. NNS purchases all inventory of medical supplies on credit. The total purchase in the current financial year amounted to $250,000. The ending balance of inventory of medical supplies was $90,000.
iii. The interest on 8% Bank Loan is accrued, but due to a computer glitch, could not be paid till 10th April 2016. The company had to pay a penalty of $10,000 along with the interest on 10th April 2016 for late payment of interest. The penalty becomes due in the year of default.
iv. The equipment has a useful life of 5 years and Building has a useful life of 10 years. The equipment that was sold on 31/12/2015 was two years old at the beginning of the year and had a historical cost of $20,000.
v. Salaries for the last two weeks of March 2015 will be paid on 5th April 2016. Such salaries amounted to $15,000. Salaries payable for previous years were paid off in the current year.
vi. The prepaid insurance is valid for another 15 months starting from 1/4/2015.
vii. Tax assessment for the years 2013-14 and 2014-15 was completed in the current year and the tax was assessed to be Rs. 100,000 for 2013-14 and 95,000 for 2014-15. Shortfall (refund), if any, was paid (received) during the year 2015-16. Provision for taxes for the current year is 25% of Profit before Tax.
viii. 10,000 new shares were issued. The face value of shares was $1 and Market value was $20.
Based on the above information, prepare the Balance Sheet,Income Statement, and Cash Flow Statement (Use Indirect Method) for the year ended on 31/3/2016.
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.