Financial Accounting simulation
Donni
HCS/405

Financial Accounting simulation
Accounting is a very important aspect of an organization. Accounting in the organization keeps the financial record of the business. Accounting consists of assets, liabilities, and the operating results of a business. Accounting first started in 3000 BC in Egypt and updated over the centuries. By 1789 the federal government became established and the federal accounting system formed. In the Financial accounting stimulation of the Cardiac Care Hospital there were examples explaining the best solution for the company. One will learn the best solution to bridge a working capital shortage. Evaluate funding options for accruing medical equipment. Evaluate funding options for capital expansion. The Capital Shortage
The capital shortage stimulation provided five options on cutting the cost. Downsizing and reducing the staff. This action will affect the quality of care because of the lack of staff. Reduce the agency staff allowed in the company. Change the skill’s mix of the employees within the company. This will make the employees more versatile. Reduce the benefits package for the employees. Reduce the patient’s length of stay in the hospital. The best choice for the company is to reduce the benefits for the employees, and change the skill mix of the staff. The annual savings for the company was 3,515,134 dollars with the decision. The hospital was also making a decision on loan options. The first option was a loan amount of 1,500,000, interest rate of 9.45%, a monthly installment of 131,490, a term payment of 12 months and no limitations. The second option the loan amount was 1,500,000, interest rate of 9.00%, a monthly installment of 131,777, a term payment of 12 months, and a prepayment limitation of six. Option one is the better choice. The installment is cheaper, and there is no prepayment limitation. The capital shortage stimulation showed one will have to make hard decision within the company. However, if the company gains more annual savings, or a better loan options the company will have to make that choice (University of Phoenix).
Funding Options for Equipment Acquisition
Hospitals have to stay advanced in the evolving economy. The high speed CT scanner is useful for 10 years. The cost of the unit is 750,000 per unit. It is expectation not to need an update drastically over the years. The X-ray machine cost 320,000 per unit. It is useful for approximately 15 years. The x ray has a less likely chance of updating. It is already advance enough in its capabilities. The ultrasound system cost 500,000 per unit. The ultrasound system is useful for approximately five years. It changes consistently over the years. The hospital has to decide either to get a new loan, refurbished loan, operating lease, or a capital lease for each of the equipments provided. A new loan will provide new equipment with the asking value of the equipment. A Refurbished loan is equipment previously owned, inspected, and restored to a sellable condition. An operating lease is an agreement for individual or company acquiring property for a small part of its useful life. The capital lease states a person lease to buy the property (University of Phoenix). The CT scanner would be better with a refurbished loan. The CT scanner is useful for 10 years, so a slightly used CT scanner will a wise decision. It will still be just as functional as a new CT scanner, and a cheaper interest rate. The x ray machine is useful for 15 years and has a low chance of updating. Therefore, a capital lease is the best choice. There is not any interest rates and system. The terms monthly rate was 40, and the present value was 370. The ultrasound system would benefit more from an operating lease. There is a monthly installment of 15. A 24-month term agreement will give the hospital a timely matter on the equipment, and a present