Prepare a cashflow statement showing operating, investing and financing cashflows for the 2016/17 financial year.

Important: You must show all calculations and explain how you got all your answers. For example, suppose a question asks what the profit will be in a particular month and you put “$50,000”. Even if this is correct you will receive no marks if you do not show how you got the answer.

There is no need for footnotes or references unless quote from a reference. It is essential that the work is your own.

Please do NOT include the question as part of your assignment. It is not necessary and all it does is increase your turnitin similarity index. Just put your answers in your assignment response.

Question 1(15 marks)

Items from the Melbourne Hospital’s balance sheet and revenue and expense (income) statement for the 2016/17 financial year (ending 30 June) were accidentally listed in alphabetical order as follows:

Balance sheet and profit and loss information

Agency costs (Nursing)                                                         12,973

Bank overdraft                                                                      73

Car park revenue                                                                  10,519

Cash and Cash Equivalents                                                  25,126

Contributions received from the Department of Health        7,527

Current Payables                                                                  53,792

Current Receivables                                                             33,994

Depreciation and Amortisation                                              61,360

Dividend income                                                                   38,798

Donations and Bequests                                                       11,939

Equity                                                                                    525,402

Finance Costs                                                                       1,545

Government grants received                                                713,203

Insurance expense                                                                11,832

Interest income                                                                      5,207

Inventories                                                                             7,210

Long term Investments                                                         44,478

Long term Loans                                                                   22,450

Long-term leave entitlements payable                                  17,187

Maintenance and Security expenses                                    23,244

Motor vehicles                                                                       12,270

Patient and Resident fees received                                      31,620

Power and utilities expense                                                   1,301

Property, Plant & Equipment                                                639,912

Rental/Property income                                                        19,028

Revenue from Private Health Insurance                              44,398

Revenue from private practice                                             31,071

Short term Loans                                                                   1,093

Short-term Employee Entitlements payable                         142,993

Superannuation                                                                     89,483

Supplies & Consumables expense                                       179,819

Transport Costs                                                                     728

Wages and Salaries                                                              549,489

  1. Prepare a balance sheet. Make sure to distinguish between current and non-current assets and liabilities. All figures are in thousands of dollars. (3 marks)
  1. Prepare an income (profit and loss) statement for this hospital. (3 marks)
  1. What are the major debts of the hospital and what are its major liquid assets? Do you think that this hospital is in a good position to pay its short-term debts? Explain your answer. (3 marks)

The Hospital’s cashflow information for the 2016/17 financial year was also put in alphabetical order as follows:

Cash flow information

Cash at beginning of year                                                     9,879

Cash at the end of year                                                         17,134

Donations and Bequests Received                                       11,939

Employee Expenses Paid                                                     553,246

Finance Costs paid                                                                1,545

GST received                                                                        25,867

Non Salary Labour Costs paid                                              12,560

Operating Grants from Government                                    720,497

Other Receipts                                                                      52,946

Patient and Resident Fees Received                                    24,027

Payments for Supplies and Consumables                            321,412

Private Practice Fees Received                                           41,590

Proceeds from Sale of Investments                                     332

Proceeds from Sale of Non-Financial Assets                       335

Purchase of Property, Plant and Equipment                        24,326

Repayment of Borrowings                                                    1,026

Revenue received from private health insurance                 43,837

  1. Prepare a cashflow statement showing operating, investing and financing cashflows for the 2016/17 financial year. (3 marks)
  1. What net cash inflow or net cash outflow did the hospital report for the 2016/17 financial year? What profit or loss did the hospital report during the financial year? Briefly explain why these figures are different. (3 marks)

Question 2 (15 marks)

The following transactions were taken for the month of June 2018 for the Bendigo General Practice. The opening cash balance in the practice’s bank account on 1 June 2018 was $12,912.

The following cash transactions occurred during June 2018.

1 June: Paid yearly insurance of $600

3 June: paid salary of $900

4 June: paid $555 for office supplies

7 June: Received payment from patients of $12,000

12 June: paid $1,307 for office supplies

15 June: paid $1416 for internet connection

17 June: Received $3,535 from patients

19 June: paid $1,400 phone bill

20 June: received $11,788 from patients

23 June: paid $900 for salaries

24 June: received $1,500 from patients

26 June: paid $500 for rent

29 June: paid $498 for computer repairs

30 June: paid $3,600 for salaries

  1. Prepare a cash flow statement for the practice for June (2 marks)
  2. Prepare a profit and loss statement for June under the accrual basis. (2 marks)

The following additional information is necessary for you to do this:


  • The $12,000 received from patients on June 7 was an advance payment for work to be performed equally during April, May, and June.
  • The $11,788 deposit on June 20 was for services delivered during April and May.
  • During June, services valued at $5,000 were delivered and billed, but not yet received.


  • Salaries — The $900 payment on June 3 consisted of $650 which related to May.
  • An additional $1,000 was salaries payable for work done in June, but not yet paid.
  • Rent — The amount paid was for month of June.
  • Internet connection — The $1,416 payment on June 15 included $700 for usage in June.
  • Office supplies — $600 of office supplies were actually used during June.
  1. Explain why the profit and loss figures and the cashflow figures are different. To do this you must show how the difference arose – eg ‘the difference between the cash flow and profit and loss figures was $5,100, of this, $600 was because…” (6 marks)
  2. Suppose you were interested in buying this practice. What figures would you consider to be the most useful? What other information would you want to consider? Explain your answer. (5 marks)



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