accounting project

Polk State College HSA 3170: Healthcare Accounting & Finance

Case Analysis: TopSpin

1). Use the template provided to prepare a 5-tab spreadsheet that addresses questions #1-5 in this case. a) In Question #1, use the Transaction Effect method through each scenario. As reminder,

the effect should be equated on each side.

THE FOLLOWING IS A SUMMARY OF THE CONCEPTS IN THE CASE:

Income Statement - Evaluates a firm’s financial performance

o Revenues – Expenses = Net Income - Based on the company’s discretion, the statement may be detailed further.

Balance Sheet - Displays the company’s resources and its claims on those resources at any given time.

o Assets = Liabilities + Equity - For simplicity of reporting, many are classified as either short-term or long-term.

Statement of Owner’s Equity - Displays the change of residual value in a company over a period of time.

o Beginning Balance + Retained Earnings from Net Income – Dividends = End Balance - Also conveys, in part, the amount of earnings kept since the company’s inception.

Accrual Based Accounting

- Recognition of goods or services exchanged without the use of cash.

Example: An employee worked 2 hours today at $10 per hour. Pay day is tomorrow. Debit Salary Expense $20 Credit Salary Payable $20

Adjusting Entry

- Correction of accruals when the cycle completes. Removes the temporary use of liability.

Example: Pay day arrives. (Assume the employee did not work any more hours.) Debit Salary Payable $20 Credit Cash $20