Healthcare finance

1.FIFO and LIFO Inventory

Study the FIFO and LIFO explanations in the chapter.
Required

a1. Use the format in Exhibit 8–1 to compute the ending FIFO inventory and the cost of goods sold, assuming $90,000 in sales; beginning inventory 500 units @ $50; purchases of 400 units @ $50; 100 units @ $65; 400 units @ $80.
a2. Also compute the cost of goods sold percentage of sales.
b1. Use the format in Exhibit 8–2 to compute the ending LIFO inventory and the cost of goods sold, using same assumptions.
b2. Also compute the cost of goods sold percentage of sales.
c. Comment on the difference in outcomes.

2: Inventory Turnover

Study the “Calculating Inventory Turnover” portion of the chapter closely, whereby the cost of goods sold divided by the average inventory equals the inventory turnover.
Required

Compute two inventory turnover calculations as follows:

1. Use the LIFO information in the previous assignment to first compute the average inventory and then to compute the inventory turnover.
2. Use the FIFO information in the previous assignment to first compute the average inventory and then to compute the inventory turnover.

Example Depreciation Concept

Assume that Metropolis Health System (MHS) purchased equipment for $200,000 cash on April 1 (the first day of its fiscal year). This equipment has an expected life of 10 years. The salvage value is 10% of cost. No equipment was traded in on this purchase.

Straight-line depreciation is a method that charges an equal amount of depreciation for each year the asset is in service. In the case of this purchase, straight-line depreciation would amount to $18,000 per year for 10 years. This amount is computed as follows:

Step 1. Compute the cost net of salvage or trade-in value: 200,000 less 10% salvage value or 20,000 equals 180,000.
Step 2. Divide the resulting figure by the expected life (also known as estimated useful life): 180,000 divided by 10 equals 18,000 depreciation per year for 10 years.

Accelerated depreciation represents methods that are speeded up, or accelerated. In other words a greater amount of depreciation is taken earlier in the life of the asset. One example of accelerated depreciation is the double-declining balance method. Unlike straight-line depreciation, trade-in or salvage value is not taken into account until the end of the depreciation schedule. This method uses book value, which is the net amount remaining when cumulative previous depreciation is deducted from the asset’s cost. The computation is as follows:

Step 1. Compute the straight-line rate: 1 divided by 10 equals 10%.
Step 2. Now double the rate (as in double-declining method): 10% times 2 equals 20%.
Step 3. Compute the first year’s depreciation expense: 200,000 times 20% equals 40,000.
Step 4. Compute the carry-forward book value at the beginning of the second year: 200,000 book value beginning Year 1 less Year 1 depreciation of 40,000 equals book value at the beginning of the second year of 160,000.
Step 5. Compute the second year’s depreciation expense: 160,000 times 20% equals 32,000.
Step 6. Compute the carry-forward book value at the beginning of the third year: 160,000 book value beginning Year 2 less Year 2 depreciation of 32,000 equals book value at the beginning of the third year of 128,000.
— Continue until the asset’s salvage or trade-in value has been reached.
— Do not depreciate beyond the salvage or trade-in value.

Practice Exercise: Depreciation Concept

Assume that MHS purchased equipment for $600,000 cash on April 1 (the first day of its fiscal year). This equipment has an expected life of 10 years. The salvage value is 10% of cost. No equipment was traded in on this purchase.
Required

1. Compute the straight-line depreciation for this purchase.
2. Compute the double-declining balance depreciation for this purchase.

Assignment Exercise : Depreciation Concept

Assume that MHS purchased two additional pieces of equipment on April 1 (the first day of its fiscal year), as follows:

1. The laboratory equipment cost $300,000 and has an expected life of = years. The salvage value is 5% of cost. No equipment was traded in on this purchase.
2. The radiology equipment cost $800,000 and has an expected life of 7 years. The salvage value is 10% of cost. No equipment was traded in on this purchase.

Required

For both pieces of equipment:

1. Compute the straight-line depreciation.
2. Compute the double-declining balance depreciation.

Example : Depreciation

This example shows straight-line depreciation computed at a five-year useful life with no salvage value. Straight-line depreciation is the method commonly used for financing projections and funding proposals.
Depreciation Expense Computation: Straight Line

Five year useful life; no salvage value

Year #

Annual Depreciation

Remaining Balance

Beginning Balance =

60,000

1

12,000

48,000

2

12,000

36,000

3

12,000

24,000

4

12,000

12,000

5

12,000

-0-
Example : Depreciation

This example shows straight-line depreciation computed at a five-year useful life with a remaining salvage value of $10,000. Note the difference in annual depreciation between Example 8B and Example 8C.
Depreciation Expense Computation: Straight Line

Five year useful life; $10,000 salvage value

Year #

Annual Depreciation

Remaining Balance

Beginning Balance =

60,000

1

10,000

50,000

2

10,000

40,000

3

10,000

30,000

4

10,000

20,000

5

10,000

10,000
Example : Depreciation

This example shows double-declining depreciation computed at a five-year useful life with no salvage value. As is often the case with a five-year life, the double-declining method is used for the first three years and the straight-line method is used for the remaining two years. The double-declining method first computes what the straight-line percentage would be. In this case 100% divided by five years equals 20%. The 20% is then doubled. In this case 20% times 2 equals 40%. Then the 40% is multiplied by the remaining balance to be depreciated. Thus 60,000 times 40% for year one equals 24,000 depreciation, with a remaining balance of 36,000. Then 36,000 times 40% for year two equals 14,400 depreciation, and 36,000 minus 14,400 equals 21,600 remaining balance, and so on.

Now note the difference in annual depreciation between Example 8B, using straight-line for all five years, and Example 8D, using the combined double-declining and straight-line methods.
Depreciation Expense Computation: Double-Declining-Balance

Five year useful life; $10,000 salvage value

Year #

Annual Depreciation

Remaining Balance

Beginning Balance =

60,000

1

24,000*

36,000

2

14,400*

21,600

3

8,640*

12,960

4

6,480**

6,480

5

6,480**

6,480

*double-declining balance depreciation

**straight-line depreciation for remaining two years (12,960 divided by 2 = 6,480/yr)
Practice Exercise 8–II: Depreciation

Compute the straight-line depreciation for each year for equipment with a cost of $50,000, a five-year useful life, and a $5,000 salvage value.
Assignment Exercise : Depreciation

Set up a purchase scenario of your own and compute the depreciation with and without salvage value.
Assignment Exercise 8–5: Depreciation Computation: Units-of-Service

Study the “Units of Service” portion of the chapter closely.
Required

1. Using the format in Table 8–A-5, compute units of service depreciation using the following assumptions:
Cost to be depreciated = $50,000
Salvage value = zero
Total units of service = 10,000
Units of service per year: Year 1 = 2,200; Year 2 = 2,100; Year 3 = 2,300; Year 4 = 2,200; Year 5 = 200
2. Using the same format, compute units of service depreciation using adjusted assumptions as follows:
Cost to be depreciated = $50,000
Salvage value = $5,000
Total units of service = 10,000
Units of service per year: Year 1 = 2,200; Year 2 = 2,100; Year 3 = 2,300; Year 4 = 2,200; Year 5 = 200

Example

Review the chapter text about annualizing positions. In particular review Exhibit 9–2, which contains the annualizing calculations.
Practice Exercise 9–I: FTEs to Annualize Staffing

The office manager for a physicians’ group affiliated with Metropolis Health System (MHS) is working on her budget for next year. She wants to annualize her staffing plan. To do so she needs to convert her staff’s net paid days worked to a factor. Their office is open and staffed seven days a week, per their agreement with two managed care plans.

The office manager has the MHS worksheet, which shows 9 holidays, 7 sick days, 15 vacation days, and 3 education days, equaling 34 paid days per year not worked. The physicians’ group allows 8 holidays, 5 sick days, and 1 education day. An employee must work one full year to earn 5 vacation days. An employee must have worked full time for three full years before earning 10 annual vacation days. Because the turnover is so high, nobody on staff has earned more than 5 vacation days.
Required

1. Compute net paid days worked for a full-time employee in the physicians’ group.
2. Convert net paid days worked to a factor so the office manager can annualize her staffing plan.

Assignment Exercise : FTEs to Annualize Staffing

The Metropolis Health System managers are also working on their budgets for next year. Each manager must annualize his or her staffing plan, and thus must convert staff net paid days worked to a factor. Each manager has the MHS worksheet, which shows 9 holidays, 7 sick days, 15 vacation days, and 3 education days, equaling 34 paid days per year not worked.

The Laboratory is fully staffed 7 days per week and the 34 paid days per year not worked is applicable for the lab. The Medical Records department is also fully staffed 7 days per week. However, Medical Records is an outsourced department so the employee benefits are somewhat different. The Medical Records employees receive 9 holidays plus 21 personal leave days, which can be used for any purpose.
Required

1. Compute net paid days worked for a full-time employee in the Laboratory and in Medical Records.
2. Convert net paid days worked to a factor for the Laboratory and for Medical Records so these MHS managers can annualize their staffing plans.

Example

Review the chapter text about staffing requirements to fill a position. In particular review Exhibit 9–4, which contains (at the bottom of the exhibit) the staffing calculations. Remember this method uses a basic work week as the standard.
Practice Exercise 9–II: FTEs to Fill a Position

Metropolis Health System (MHS) uses a basic work week of 40 hours throughout the system. Thus, one full-time employee works 40 hours per week. MHS also uses a standard 24-hour scheduling system of three 8-hour shifts. The Admissions manager needs to compute the staffing requirements to fill his departmental positions. He has more than one Admissions office staffed within the system. The West Admissions office typically has two Admissions officers on duty during the day shift, one Admissions officer on duty during the evening shift, and one Admissions officer on duty during the night shift. The day shift also has one clerical person on duty. Staffing is identical for all seven days of the week.
Required

1. Set up a staffing requirements worksheet, using the format in Exhibit 9–4.
2. Compute the number of FTEs required to fill the Admissions officer position and the clerical position at the West Admissions office.

FTEs to Fill a Position

Metropolis Health System (MHS) uses a basic work week of 40 hours throughout the system. Thus, one full-time employee works 40 hours per week. MHS also uses a standard 24-hour scheduling system of three 8-hour shifts. The Director of Nursing needs to compute the staffing requirements to fill the Operating Room (OR) positions. Since MHS is a trauma center, the OR is staffed 24 hours a day, 7 days a week. At present, staffing is identical for all 7 days of the week, although the Director of Nursing is questioning the efficiency of this method.

The Operating Room department is staffed with two nursing supervisors on the day shift and one nursing supervisor apiece on the evening and night shifts. There are two technicians on the day shift, two technicians on the evening shift, and one technician on the night shift. There are three RNs on the day shift, two RNs on the evening shift, and one RN plus one LPN on the night shift. In addition, there is one aide plus one clerical worker on the day shift only.
Required

1. Set up a staffing requirements worksheet, using the format in Exhibit 9–4.
2. Compute the number of FTEs required to fill the Operating Room staffing positions.

Get a Quick Quote

Approximately 250 words
Total price (USD) $: 10.99

Let us do the hard and easy stuff in nursing for you

Find an experts in Nursing Papers and kickstart your grades today with NursingPapersLib.com

Best nursing assignment writers

It is easy to promise the availability of help with nursing assignments but without the best nursing assignment writers in the industry, such promises can turn out to be hot air. Our expert nursing writing services feature seasoned professionals who have been providing nursing writing help and consultation services for a long time. Irrespective of the year of study or practice students are involved in, the best nursing assignment writers know the nuances of nursing student’s needs. There is no better way to assure you of the best nursing writing services than providing nursing writing help from peers who are ahead of you and have only the best interests at heart. Only the best nursing assignment writers will handle your request for the best nursing writing service because your communication can get through to them. Knowing the potential nursing writing help that you seek from the way you frame your request is the hallmark of a writer who provides expert nursing writing services. This is because, with their knowledge, there is likely less room for misunderstood requests when you are seeking the best nursing writing service you need.

How it Works

Place an Order

Provide your contact information, select an order type, and describe your requirements. This isn’t going to take long!

Image showing step 1 of making an order
Image showing how to make payment for your order

Select an Appropriate Writer

We’ll match your specifications with our available authors after we have all of the relevant information concerning your order.

Image showing how to download your completed results

Enjoy the End Product

One of our specialists will fulfill your purchase according to your specifications so that you are happy with the end result.

Why Choose us?

Free Revisions

We understand that not always out tutors could catch all details required which arises a s a result of miscommunication or inadequate information provided. However, we are always eager to provide you with free revisions till we get it right with your Nursing Papers.

Quality Non-plagiarized Nursing Papers

Our Professional Team of Nursing Writers always adhere to quality standards and plagiarism policy. Furthermore, we employ Quality Control Tools to ensure you get Custom Written Nursing Paper. Every paper is reviewed by an independent editor for syntax errors before submission

Professional Nursing Writers

At NursingPapersLib.com, we specialize in Nursing Homework Help Services only. Thus, this allows us to cater to our nursing students and get high qualified nursing tutors who will deliver exceptional results in nursing papers

Flexible Pricing

We always endear to provide best prices that matches our quality and your budget. This is why we provide a pricing mechanism based off several factors such as length, level of education and type of assignment. our pricing are highly competitive across the industry standard prices.