Healthcare Finance

Part 1: Inventory Concept and Calculations
•Discuss the inventory concept
•List an example of an inventory item and discuss how the item moves from inventory to COGS (Costs of Goods Sold). Include information on the meaning of COGS.
•Calculate the cost of ending inventory and COGS using the information provided within the template. ◦FIFO

Part 2: Define the Five Methods for Computing Book Depreciation
•Define each of the following methods for computing book depreciation: ◦Straight Line Depreciation Method
◦Accelerated Book Depreciation: Sum of Years’ Digits (SYD) Method
◦Accelerated Book Deprecation: Double Declining Balance (DDB) Method
◦Accelerated Book Deprecation: 150% Declining Balance Method

Part 3: Calculating Depreciation
•Calculate depreciation for three of the depreciation methods identified in the template. ◦Example of Straight Line Depreciation Method
◦Example of Accelerated Book Depreciation: SYD Method
◦Example of Accelerated Book Deprecation: DDB Method

Part 4: Analysis of Depreciation Methods
•Explain which method would be more feasible for healthcare organizations to use ◦Hospital
◦Physician practice

•Explain why it is important for a healthcare organization or physician practice to use a depreciation method.

Part 5: Recommendation
•What is the depreciation method you would recommend to Dr. Smith and Dr. Brown to purchase the fixed asset? Explain the rationale for your choice.

Please use Scholarly, Peer Reviewed resources

Sample Solution