Green Valley Nursing Home Assets Current Assets: Cash $105,737 Investment 200,00
ID: 2612525 • Letter: G
Question
Green Valley Nursing Home
Assets
Current Assets:
Cash $105,737
Investment 200,000
Net patient accounts receivable 215,600
Supplies 87,655
Total Current Assets $608,992
Property & Equipment $2,250,000
Less Accumulated Depreciation 356,000
Net Property & Equipment $1,894,000
Total Assets $2,502,992
Liabilities & Shareholders’ Equity
Current Liabilities:
Accounts Payable $ 72,250
Accrued Expenses 192,900
Notes Payable 180,000
Total Current Liabilities $445,150
Long-term debt $1,700,000
Shareholder’s Equity:
Common Stock, $10 per value $100,000
Retained Earnings 257,842
Total Shareholders’ Equity $357,842
Total Liabilities & Shareholders’ Equity $2,502,992
4.6 Considering the balance sheet for Green Valley Nursing Home:
B. What is Green Valley’s net working capital for 2011?
C. What is Green Valley’s debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare?
Explanation / Answer
Net working capital = current assets – current liabilities
= $608,992-$445,150
= $163,842
Debt ratio = Total debt÷Total assets
=($1,700,000+$445,150)÷$2,502,992
=0.86
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