Health Care Finance 

Discussion Topics/Questions: 

1.) Dr. Jay is opening an emergency vet service within his community in January. He invested $425,000 cash into the business. Dr. Jay bought vet supplies, equipment, vet software, and office equipment for $200,000. In addition, there is a long-term loan for $50,000. What is his total owner’s equity?

 2.) A dental organization has $725,000 as an outstanding loan, for which the principal must be paid at the rate of $150,000 for the next 5 years. In the balance sheet, what would be the current portion of long-term debt and what is the remaining debt?

3.) Plastic Surgery Associates buys surgical lights for $10,000. The lights have an estimated salvage value of $2,000 and a useful life of 5 years. Calculate the straight-line depreciation.

4.) A large urban health maintenance organization (HMO) purchases a vacant office building to house expanded administrative functions for $300,000. Prior to using the building, renovations costing $100,000 are completed. The renovated building has an estimated useful life of 27.5 years, with no residual value. What is the annual charge for depreciation?

Discussion Requirements: Please answer all questions above to receive "FULL" credit. 

APA Format

Chapter 6

Course Materials- Cengage 2nd edition: Introduction to Health Care Finance and Accounting- Carlene Harrison and William P. Harrison