Question 1: This Is Finance Class; There Are Two Prob 689476

Question 1this Is Finance Class They Are Two Problems But Its One Q

This is finance class. They are two problems, but its one question. The template is below. Problem 10-27. HELP started the year with the following account balances (shown in alphabetical order): Accounts Receivable ..............$ 300,000 Cash ........................135,000 Accounts Payable ..................0 Equipment ...............................70,000 Line of Credit .........................100,000 Permanently Restricted Net Assets ..........167,000 Supplies .....................................7,000 Temporarily Restricted Net Assets .........50,000 Unrestricted Net Assets ...............125,000 Wages Payable .........................70,000 Record these opening balances and the transactions from Problem 10-26 (Problem10-26) The Hospital for Ending Long-term Problems (HELP) had the following financial events during the year: 1. HELP collected $ 250,000 in cash that it had billed to the federal government under Medicare. The money had been earned in the prior fiscal year, and was recorded as revenue then. 2. HELP paid back $ 100,000 it borrowed at the end of last year on a line of credit. The bank did not charge interest. 3. HELP bought $ 25,000 in supplies to treat patients. HELP paid the supplier for all the supplies with cash. 4. HELP belongs to the state hospital association, and its membership is current (meaning it is paid up through the end of the year). HELP receives an invoice for $ 75,000 for next year's fees but has not paid it yet. 5. HELP replaced many of the patient examination tables. They cost $ 50,000, and HELP put $ 10,000 down in cash. The rest is still owed. 6. HELP paid $ 65,000 it owed employees from last year. Employees had earned this last fiscal year, and it was recorded as an expense then. Show the impact of these transactions on the fundamental equation of accounting. Question 2. 11-5 ARCH began the year with the following balances (shown in alphabetical order) in their accounts: Accounts Payable $27,000 Accounts Receivable, net 26,000 Cash 10,000 Inventory 25,000 Notes Payable 270,000 Permanently Restricted Net Assets 100,000 Pledges Receivable 350,000 Property, Plant, and Equipment, net 350,000 Temporarily Restricted Net Assets 30,000 Unrestricted Net Assets 302,000 Wages Payable 32,000 Record this information and the transactions from Problem 11-14 in a worksheet similar to Exhibit 11-7. (Problem 11-14) The American Research Council of Humanity (ARCH) had the following financial events during the current year: 1. January 12. Received a $300,000 payment from a pledge made last year. 2. February 4. Placed an order for new cubicle partitions with five-year useful lives, for $15,000. ARCH uses straight-line depreciation. Payment was not yet made, and the partitions have not yet been delivered. 3. March 1. Paid out a $50,000 grant to the Governmental Archeological Research Committee for History (GARCH). This was a new grant made in the current fiscal year. 4. May 29. Paid a $5,000 deposit for the partitions ordered on February 4. 5. June 12. Collected $80,000 in new donations. 6. September 1. ARCH bought $60,000 of books it has sponsored in the past to sell in its online bookstore. They paid half now, and still owe the other half, to be paid at the end of the year. ARCH has budgeted to sell the books for $100,000 total. 7. October 15. The partitions ordered on February 4 arrived, and ARCH paid for the balance owed. 8. November 10. ARCH borrowed $75,000 from its bank on a note payable. 9. December 5. ARCH repaid $25,000 on the note payable, and also $3,000 in interest expenses. 10. December 28. ARCH paid its employees $75,000 of wages in cash for the year, $70,000 of which was for the current year and $5,000 of which was for the outstanding balance owed. Employees earned $90,000 in wages for the year. 11. December 31. Book sales from the Internet book-store totaled $ 110,000, and the cost of the books sold was $58,000. ARCH has not collected $12,000 of the sales. The balance owed for the inventory was paid. The remaining unpaid sales are expected to be collected. 12. ARCH expects that of the $12,000 not collected to date, it will collect $10,000. 13. December 31. Depreciation on ARCH’s building for the year is $40,000. Record these transactions and any other required adjusting entries by showing their impact on the fundamental equation of accounting or journal entries. Name _______________________________________ LL61 Professor McNally

Paper For Above instruction

The assignment combines two primary accounting problems involving the recording of financial transactions and their impact on the fundamental accounting equation. The first problem focuses on the hospital (HELP) and its event transactions, while the second involves ARCH and its annual financial activities. Both require analyzing each transaction's effect on assets, liabilities, and net assets (or equity), followed by preparing journal entries or showing their impact on the accounting equation. This comprehensive exercise aims to develop understanding of the fundamental accounting principles and the ability to accurately record and interpret financial data in diverse organizational contexts.

Impact of Transactions on HELP’s Financial Position

HELP's initial balances depict a health organization with substantial assets and net assets, including unrestricted and restricted categories. During the year, HELP experienced several financial events affecting its balance sheet components. The first event involved collection of $250,000 in Medicare revenue earned in a prior fiscal year, increasing cash and revenue but not impacting current assets or liabilities. The second event was the repayment of a $100,000 line of credit, which decreased both cash and liabilities. The third event, purchasing $25,000 in supplies, increased supplies (asset) and decreased cash. Payment for supplies directly reduces cash, while the supplies increase assets, affecting the current assets total.

The fourth event pertains to HELP's membership dues, an invoice of $75,000 for future fees, not yet paid, which increases accounts payable (liability) and expenses or accrued liabilities. The fifth event involved replacing examination tables costing $50,000, with a down payment of $10,000, increasing equipment (asset) and decreasing cash, with the remaining owed as liabilities. The sixth event was the payment of $65,000 owed to employees from the prior year, which decreases liabilities and cash or accrued expenses. These transactions collectively impact HELP’s assets, liabilities, and net assets, demonstrating typical changes in healthcare organization finances.

Impact of ARCH’s Financial Activities

ARCH’s beginning balances reveal a mixture of assets, liabilities, and net assets, including significant pledges receivable and property assets. Its fiscal year involved numerous activities, such as receiving a pledge payment of $300,000, which increases cash and decreases pledges receivable. Placing an order for partitions worth $15,000 (not yet paid), affects commitments and future liabilities, with depreciation on the partitions to be calculated over their useful life, impacting expenses. Payments to GARCH and deposits on orders influence liabilities and cash flows.

Income activities include receiving donations of $80,000 and selling books with a total sales of $110,000, of which $12,000 remains unpaid at year-end. The purchase of books for resale affects inventory and cash. Borrowing $75,000 increases liabilities (notes payable) and cash, while repayments reduce liabilities and cash. Year-end depreciation of $40,000 reduces property value and increases expenses. Each transaction affects the accounting equation, demonstrating the dynamic nature of nonprofit organization finances and the importance of recording accurate journal entries.

Conclusion

Both HELP and ARCH exemplify how various financial activities influence assets, liabilities, and net assets. Proper recording and understanding of these transactions are essential for maintaining accurate financial statements and ensuring compliance. This exercise underscores the importance of clear bookkeeping and awareness of transaction impacts, which are fundamental skills in financial administration across different organizational types. Effective management of assets, liabilities, and net assets helps organizations meet their operational and strategic objectives, reinforcing the core principles of accounting.

References

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