Question

Following is a trial balance (in thousands) showing the accounts of Beta Hospital at December 31, 2019. Using the information from the trial balance, answer the following questions. Show the calculations used. PLEASE SHOW WORK AND EXPLAIN HOW DID YOU GET THE ANSWER

1. What is number of days’ cash on hand?
2. What is the number of days of revenue in net patient accounts receivable?
3. How much is the excess of revenues over expenses?
4. What is the operating margin?
5. What is the long-term debt-to-equity ratio at year-end?
6. What is the interest coverage (times interest earned)?

	Debits	Credits
Cash	$6,000
Patient accounts receivable	9,000
Allowance for bad debts		$2,000
Food and medicines inventory	1,000
Buildings	50,000
Accumulated depreciation, buildings		15,000
Equipment	20,000
Accumulated depreciation, equipment		18,000
Land	15,000
Accounts payable		9,000
Accrued interest payable		1,000
Current portion of bonds payable		1,500
Long-term bonds payable		43,000
Net position, January 1, 2019		17,300
Patient service revenues (net)		40,200
Patient care expense	30,000
Dietary expense	3,000
General and administrative expense	6,000
Bad debts expense	2,000
Depreciation, buildings and equipment	4,000
Interest expense	1,000
Totals	$147,000	$147,000

Answer 1