ITEM 1. BUSINESS
Consolidated Resources Health Care Fund IV (the "Partnership") was organized on August 10, 1984, as a Limited Partnership under the provisions of the Georgia Uniform Limited Partnership Act.
At December 31, 1995, the Partnership had three general partners (the "General Partners"), WelCare Consolidated Resources Corporation of America, a Nevada corporation, serving as the Corporate General Partner ("WCRCA" or the "Corporate General Partner"), Consolidated Associates IV, and WelCare Service Corporation-IV ("WSC-IV" or the "Managing General Partner"), a Georgia Corporation, serving as Manager General Partner. WCRCA and WSC-IV are wholly- owned subsidiaries of WelCare Acquisition Corp., a Georgia corporation, which is in turn a wholly-owned subsidiary of WelCare International, Inc. ("WelCare"). WelCare, a privately-owned Georgia corporation, is engaged in the operation, acquisition, property management and oversight management of long- term care facilities. Consolidated Associates IV, a Georgia general partnership, is composed of WCRCA, as the managing general partner, and individuals who were previously associated with Consolidated Resources Corporation of America ("CRCA").
Pursuant to an agreement dated October 30, 1985, CRCA, a Georgia corporation that initially was the corporate general partner of the Partnership, was merged into a subsidiary of Southmark Corporation ("Southmark"). The name of the surviving Southmark subsidiary was then changed to Southmark Consolidated Resources Corporation of America ("SCRCA"). Southmark, a Georgia corporation, emerged from Chapter 11 bankruptcy on August 10, 1990, and liquidated most of its assets under its plan of reorganization. On November 20, 1990, WelCare, through its subsidiary WelCare Acquisition Corp., acquired from Southmark all the stock of SCRCA whose name was then changed to WelCare Consolidated Resources Corporation of America. Southmark has not been affiliated with the Partnership since November 1990. WSC-IV was added as the Managing General Partner of the Partnership on January 7, 1992, following the approval by a majority-in-interest of the Partnership's limited partners. The acquisition of SCRCA by WelCare Acquisition Corp., and the addition of WSC-IV as Managing General Partner did not result in a change in the compensation paid the General Partners (See Item 8, Notes 1 and 2, and Item 13).
On October 15, 1984, a Registration Statement on Form S-1 was declared effective by the Securities and Exchange Commission whereby the Partnership offered for sale $30,000,000 of Limited Partnership Units. The Limited Partnership Units represent equity interests in the Partnership and entitle the holders thereof ("Limited Partners") to participate in certain allocations and distributions of the Partnership. The sale of Limited Partnership Units closed in April 1985 with 26,283 units sold at $1,000 each, for gross proceeds of $26,283,000 to the Partnership.
The Partnership's primary business and only industry segment is to own, operate and ultimately dispose of a diversified portfolio of health care related real properties for the benefit of its Limited Partners. As of December 31, 1995, the Partnership owned two nursing homes in Kansas. During October 1995, a nursing home in Missouri owned by the Partnership was sold (see Note 7).
Current Developments
A majority-in-interest of the Partnership's Limited Partners approved a proposal, on October 18, 1994, which provides for the sale of all of the Partnership's remaining assets and the eventual dissolution of the Partnership, as outlined in a proxy statement dated September 28, 1994. Under the approved proposal, the Limited Partners consented for the Managing General Partner to attempt to sell or otherwise dispose of its remaining properties prior to October 18, 1997. Upon the disposition of all of its assets, the approved proposal requires that the Managing General Partner dissolve the Partnership.
As discussed in Item 8, Note 4, the Partnership's mortgage debt obligations were in default as of December 31, 1995. The Partnership will continue to operate the facilities and plans to (A) sell the properties to prospective purchasers, or (B) negotiate a settlement with its lenders.
Operation of Nursing Home Facilities
At the beginning of 1991, all six of the Partnership's existing nursing homes were managed by National Heritage, Inc. ("NHI"). NHI, a New York Stock Exchange listed company, was affiliated with the Partnership prior to WelCare's subsidiary's acquisition of the Corporate General Partner on November 20, 1990. Effective March 1, 1991, NHI was terminated as manager of Kent's Nursing Center and Life Care Centers of America, Inc. ("LCCA"), a privately-owned corporation, began managing this facility. In September 1991, the Partnership terminated NHI as manager of the Partnership's three facilities located in Kansas. In the fourth quarter of 1991, the Partnership notified NHI that effective January 31, 1992, NHI was terminated from providing management services at the Partnership's remaining two facilities. Lawsuits between the Partnership and NHI ensued and on December 31, 1991, NHI and the Partnership entered into a Consent Order which allowed NHI to perform accounting services for two facilities under the supervision of the Corporate General Partner and the Court (See Item 3). This litigation was resolved in October 1993 and NHI no longer performs accounting or any other services for the Partnership's facilities. (See Note 9).
An affiliate of the Corporate General Partner assumed direct management responsibilities for the three Kansas facilities following NHI's termination effective September 1, 1991, and at River Oaks Care Center and Heritage Manor of Mountain Grove effective February 1, 1992. This affiliate received a management fee of 6% of gross revenues at Heritage Manor of Hiawatha, Heritage Manor of Mountain Grove and Heritage Manor of Emporia, and an aggregate management and accounting fee of 6% of gross revenues at Heritage Manor of Hoisington and River Oaks Care Center. An affiliate of the Corporate General Partner provided oversight management services for Kent's Nursing Center and received a fee equal to 1% of gross revenues. A management fee of 5% of Kent's Nursing Center's gross revenues was paid to LCCA. Kent's Nursing Center, Heritage Manor of Hiawatha and River Oaks Care Center were sold by the Partnership during 1993.
As a result of efforts made by the Corporate General Partner, in 1991 a distribution of $150,000 was made to the Limited Partners, the first such distribution since 1987. No distributions were made in 1992. During 1993, the Partnership distributed $750,000 to the Limited Partners as proceeds from the facility sales. During 1994, the Partnership distributed $1,000,000 to the Limited Partners from the sale of Rainbow Springs. No distributions were made during 1995.
The Partnership's Rainbow Springs parcel contained undeveloped land, a partially developed hotel and two operating 18-hole golf courses. The Rainbow Springs facility competed with other golf courses in the Milwaukee market, as well as against other facilities with spring and summer recreational activities. In 1989, the joint owner of Rainbow Springs filed for bankruptcy protection. The bankruptcy court, having jurisdiction over this joint owner, ordered a public auction to take place on January 31, 1994, and the sale of the property was closed on March 21, 1994.
As of December 31, 1995, the Partnership employed approximately 140 persons, including administrative, nursing, dietary, social services and maintenance personnel.
The services provided at the Partnership's nursing facilities consist of long- term nursing care. Nursing care consists of 24 hour professional nursing care and related medical services prescribed by the resident's physician, as well as assistance or supervision with activities of daily living such as dressing, grooming, bathing, medication and dietary needs.
All of the nursing facilities are certified to receive benefits under joint Federal and State funded programs administered by the respective states to provide medical assistance to the indigent, known generally as the "Medicaid". Benefits under the Federal Health Insurance for the Aged Act ("Medicare") are for skilled care only in those facilities which are certified for this program. Medicaid reimbursement formulas vary by state and are established in accordance with Federal guidelines. Typically, Medicaid provides for reimbursement for nursing home care of an all-inclusive nature up to specified limits based on historical costs, with adjustments for inflation. Federal law requires that Medicaid reimbursement rates be reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities to provide care and services in conformity with applicable laws, regulations and quality and safety standards. Medicaid payments are generally set prospectively for each facility, with the exception of a few states, where retrospective settlement exists.
The Medicare and Medicaid programs are subject to statutory and regulatory changes, administrative rulings, interpretations of policy and determinations by intermediaries, and to governmental funding restrictions, all of which may materially increase or decrease program payments to long-term care facilities and could adversely affect the operations of the Partnership's nursing home facilities.
In the operation and sale of its long-term care facilities, the Partnership competes with a number of individuals and entities, including large, national nursing home chains and small, locally owned geriatric facilities. Some competing operators have greater financial resources than the Partnership or may operate on a nonprofit basis or as charitable organizations. The degree of success with which the Partnership's facilities compete varies by location and depends on a number of factors. The Partnership believes that the quality of care provided, the reputation and physical appearance of facilities and, in the case of private pay patients, charges for services, are significant competitive factors. There is limited, if any, competition in price with respect to Medicaid and Medicare patients since revenues for services to such patients are strictly controlled and based on fixed rates and cost reimbursement principles. In light of these factors, the Partnership seeks to meet competition in each locality by improving the quality of services provided at its facilities, establishing a reputation within the local medical community for providing excellent care services, and by responding appropriately to regional variations in demographics and tastes. In most states, approval by state healthcare regulatory agencies must be obtained and a Certificate of Need ("CON") or authorization issued before new long-term care beds can be constructed. This tends to stabilize competition. However, some states have already or are considering a repeal of CON programs. Kansas, in which the Partnership owns two facilities, does not currently require a CON.
The following table sets forth information regarding the average daily census and sources of patient revenues at the Partnership's facilities at December 31, 1995:
		 Average Daily Census for Revenues for 		 Year Ended Year Ended 		 December 31 ,1995 December 31 ,1995
Medicaid 73 55.0% 49.0% Private Pay 54 41.0% 44.0% VA, Medicare and Other 5 4.0% 7.0%
		 132 100% 100%
Overall Occupancy Rate 89%
Because of a changing census mix (i.e. private pay patients vs. government reimbursed patients), the occupancy required for a facility to achieve an operating break-even point cannot be determined precisely. Generally, a greater ratio of Medicaid patients will require a higher occupancy to reach a break-even point. On the other hand, a high Medicare census can lower the number of patients necessary to reach the break-even point due to a higher reimbursement rate.
All licensed beds in the operating facilities are available except in a few instances where a small number of rooms have been taken out of service to be utilized as office space and ancillary support areas, including revenue generating rehabilitation services.
ITEM 2.

ITEM 2. DESCRIPTION OF PROPERTY
The following table sets forth the investment portfolio of the Partnership at December 31, 1995. The buildings of the projects and the land on which they are located are owned by the Partnership and its majority-owned partnerships. The fee is subject in each case to secured debt, as set forth more fully in Item 8, Note 4.
		 Properties (dollars in 000's) 		 Net 	Secured Acquisition Book Date Property Debt Cost Value Acquired
Heritage Manor of Emporia Emporia, KS 79 Licensed Nursing Home Beds $1,115 $2,809 $313(1) October 1985
Heritage Manor of Hoisington Hoisington, KS 70 Licensed Nursing Home Beds 649 1,387 431(1) July 1985
Totals $1,764 $4,196 $744
These facilities have a total of 149 beds.
(1) A provision was made to write down the facility, for Partnership financial statement purposes, to its estimated fair value or net realizable value at the time of the write-down as determined by the Corporate General Partner (See Item 8, Note 6). The amount reflects this write-down.
Occupancy Levels and Rental Rates
The following table sets forth the occupancy levels and rental rates for the past four years for the facilities owned by the Partnership as of December 31, 1995. Rental rates are presented as Per-Patient-Day amounts ("PPD"), the standard of comparison used in the long-term care industry. The PPD amount represents the average revenue received per day of care provided.
	 1995 1994 1993 1992 1991
Heritage Manor of Emporia
Occupancy Rate 86% 89% 91% 78% 48% Rental Rate (PPD) $70.00 $64.00 $57.00 $47.00 $42.00 					 Heritage Manor 	of Hoisington
Occupancy Rate 92% 94% 98% 97% 97% Rental Rate 	(PPD) $68.00 $61.00 $53.00 $49.00 $47.00
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
At December 31, 1995, the Partnership was not a party to any material pending legal proceeding, other than ordinary litigation routine to the Partnership's business.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
	PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP 	AND SECURITY HOLDER MATTERS
(A) No market for Limited Partnership Units exists nor is one 	expected to develop.
(B) Title of Class Number of Record Unit Holders
	Limited Partnership Units 2,914 as of March 1, 1996
(C) Due to improvements in operations following WelCare's subsidiary's acquisition of the Corporate General Partner and proceeds received from the sale of Heritage Manor of Red Boiling Springs, the Corporate General Partner caused the Partnership to distribute $150,000 to the Limited Partners in 1991. This was the first distribution to the Limited Partners since 1987. In 1994 and 1993, the Partnership distributed $1,000,000 and $750,000, respectively, of proceeds from facility sales.
	Future distributions are dependent on the Partnership's ability to meet its ongoing obligations and to generate proceeds from the sale of its assets in excess of existing debt. Cumulative distributions paid to the Limited Partners as of December 31, 1995, were $5,446,590. There have been no distributions to the General Partners. See Liquidity and Capital Resources section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8, Note 5 for discussion of distributions.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth a summary of selected financial data for the Partnership. This summary should be read in conjunction with the notes to the Partnership's financial statements appearing in Item 8.
			Years Ended December 31, (dollars in 000's, 			 except per share figures) Statements of Operations 1995(1) 1994(2) 1993(3) 1992 1991
Operating revenue $5,321 $4,997 $9,319 $11,111 $10,406 Income (loss) before extraordinary gain (365) (356) 1,520 (3,049) (1,279) Net income (loss) 1,901 (46) 2,853 (3,049) (1,279) Income (loss) before extraordinary gain per weighted average Limited Partnership Unit (12.90) (12.30) 58.25 (111.38) (46.72) Net income (loss) per weighted average Limited Partnership Unit 69.86 (0.99) 108.49 (111.33) (46.72) Distribution paid per weighted average Limited Partnership Unit - 38.05 28.54 - 5.71
			Years Ended December 31, (dollars in 000's, 			 except per share figures) Balance Sheets 1995(1) 1994(2) 1993(3) 1992 1991
Property and equipment, net $ - $ - $3,506 $5,443 $7,590 Property held for sale 744 3,268 2,016 3,558 4,000 Total assets 1,953 5,194 7,870 11,186 14,087 Long-term debt obligations, less current maturities - - 2,825 5,380 5,436 Partners equity (deficit) (241) (2,142) (1,096) (3,200) (150)
(1) During 1995, the Partnership sold one facility. (2) During 1994, the Partnership sold one facility. (3) During 1993, the Partnership sold three facilities.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 	CONDITION AND RESULTS OF OPERATIONS
Plan of Operations
A majority-in-interest of the Partnership's Limited Partners approved a proposal, on October 18, 1994, which provides for the sale of all of the Partnership's remaining assets and the eventual dissolution of the Partnership, as outlined in a proxy statement dated September 28, 1994. Under the approved proposal, the Limited Partners consented for the Managing General Partner to attempt to sell or otherwise dispose of its remaining properties prior to October 18, 1997. Upon the disposition of all of its assets, the approved proposal requires that the Managing General Partner dissolve the Partnership.
As discussed in Item 8, Note 4, the Partnership's two mortgage debt obligations were in default as of December 31, 1995. The Partnership will continue to operate the facilities and plans to negotiate an extension with its lenders while it proceeds with the sale of its properties.
At December 31, 1995, the Partnership has held available for sale all of its nursing home facilities. Accordingly, the Partnership has classified the facilities as Property held for sale in the accompanying balance sheet.
Results of Operations
Revenue:
1995 compared to 1994
Operating revenues increased by $323,347 for 1995 compared to the prior year. This increase is due primarily to a change in patient mix at the Oaks of Mountain Grove ("Mountain Grove"). On October 18, 1995, Mountain Grove was sold. During the time it was owned by the Partnership in 1995, Mountain Grove generated $2,274,988 in revenues. During 1994, Mountain Grove generated $1,873,943 in revenues. The remaining increase over the prior year was due primarily to increases in rates at the Partnership's two remaining facilities and partially to an increase in Medicare census.
1994 compared to 1993:
Operating revenues decreased by $4,322,083 for 1994, compared to the prior year, primarily due to the sale River Oaks Care Center ("River Oaks"), Kent's Nursing Center ("Kent's"), Heritage Manor of Hiawatha ("Hiawatha") and Rainbow Springs ("Rainbow"). River Oaks was sold effective April 1, 1993, Kent's and Hiawatha were sold effective October 1, 1993, and Rainbow was sold effective March 21, 1994. These sold properties generated revenue of $4,408,703 for the Partnership in 1993. Revenue increased at the Partnership's remaining facilities in 1994 due to Medicaid rate increases at the Kansas facilities and increased Medicare utilization at all facilities.
Expenses:
1995 compared to 1994
Operating expenses increased by $95,817 for 1995. As discussed above, Mountain Grove was sold during 1995. This facility incurred $2,114,511 in operating expenses during the time it was owned by the Partnership in 1995. During 1994, Mountain Grove incurred $1,933,092 in operating expenses. The increase at Mountain Grove was due primarily to salary increases and additional therapy utilization as compared to the prior year. The reduction in operating expenses at the Partnership's remaining facilities was due to reductions in expenses associated with a decrease in overall patient census.
1994 compared to 1993:
Operating expenses decreased by $2,972,738 for 1994, compared to the prior year, primarily due to the sale during 1993 of the Kent's, River Oaks, Hiawatha and Rainbow facilities. These sold properties produced operating expenses of approximately $4,390,564 for the full year of 1993. Operating expenses at the Partnership's remaining facilities increased due to increased staffing levels, salaries and insurance costs. Interest expense decreased $188,412 due to the sales and retirements of debts on Kent's, River Oaks, and Hiawatha in 1993.
Liquidity and Capital Resources
As discussed in the financial statements (see Item 8, Note 3), the Partnership's financial statements have been presented on the basis that it is a going concern. The Partnership does not anticipate improved liquidity during the remainder of 1996, due to the expected operating cash flow from the Partnership's two remaining facilities, monthly debt service payments and the payment of recurring partnership expenses. As discussed in more detail below, the Partnership is currently seeking an extension on debt obligations secured by its two remaining facilities. Should the lenders of these debts pursue their satisfaction, the related facilities could be lost to foreclosure and the financial resources and liquidity of the Partnership could be adversely impacted.
At December 31, 1995, the Partnership held cash and cash equivalents of $628,543. Cash is being held in reserve for working capital, capital improvements and operating contingencies.
During 1995, the Partnership maintained current debt service payments on all of its debt secured by facilities currently owned by the Partnership. The Partnership should produce sufficient cash flow from operations during 1996 to continue to satisfy current monthly debt service obligations.
On September 14, 1995, the Partnership received $250,000 in payment of its note receivable from the Purchaser of Red Boiling Springs, a facility sold by the Partnership in 1991. These funds will be used to meet working capital requirements.
As of December 31, 1995, the Partnership was not obligated to perform any major capital additions or renovations and no such capital expenditures or renovations are planned for 1996. Necessary minor repairs, maintenance and capital expenditures are expected to be funded by existing cash reserves.
Significant changes have and will continue to be made in government reimbursement programs, and such changes could have a material impact on future reimbursement formulas. Based on information currently available, Management does not believe that proposed legislation will have an adverse effect on the Partnership's operations. However, as health care reform is ongoing, the long-term effects of such changes cannot be accurately predicted at the present time.
The Partnership is in default on the long-term debt obligations secured by Heritage Manor of Hoisington and Heritage Manor of Emporia as these loans were due April 1, 1996. The Partnership is currently seeking extensions from the lender on these debts. The inability to obtain extensions could result in foreclosure and a loss of these facilities. The Partnership is currently seeking purchasers for these facilities at a sales price that would satisfy the operating and debt obligations of the facilities. The Managing General Partner anticipates obtaining extensions sufficient to allow for the orderly sale of these facilities, however, there can be no assurance that the facilities can be sold prior to foreclosure. As long as these default situations exist, the Partnership remains at risk relative to these loans. The Partnership has no existing lines of credit to draw upon should present resources or cash flow from operations be inadequate.
Accounting Prouncement
The Financial Accounting Standards Board has issued Statement on Financial Accounting Standards No. 121,"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). The Company will adopt this standard in Fiscal 1996. In management's opinion, there will be no material effect on the Company's financial statements of adopting SFAS No. 121.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index Page Number
Report of Independent Certified Public Accountants 13
Consolidated Financial Statements
		Balance Sheets - December 31, 1995 and 1994 14-15
		Statements of Operations 16 		- Years ended December 31, 1995, 1994 and 1993
		Statements of Partners' Deficit 17 		 - Years ended December 31, 1995, 1994 and 1993 	 		Statements of Cash Flows 18 		- Years ended December 31, 1995, 1994 and 1993
		Summary of Significant Accounting Policies 19-21
		Notes to Consolidated Financial Statements 22-27
The following financial statement schedule for the years ended December 31, 1995, 1994 and 1993 of the Registrant is submitted herewith in response to Item 14 (a)(2):
Schedule II - Valuation and Qualifying Accounts 29
All other schedules of the Partnership for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions, are inapplicable or have been disclosed in the notes to the consolidated financial statements and, therefore, have been omitted.
Report of Independent Certified Public Accountants
The Partners Consolidated Resources Health Care Fund IV and Subsidiaries
We have audited the accompanying consolidated balance sheets of Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships) (the "Partnership") as of December 31, 1995 and 1994, and the related consolidated statements of operations, partners' deficit and cash flows for each of the three years in the period ended December 31, 1995. We have also audited the schedule listed in the accompanying index. These consolidated financial statements and schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements and schedule are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements and schedule. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and schedule. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships) at December 31, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles.
Also, in our opinion, the schedule presents fairly, in all material respects, the information set forth therein.
The accompanying consolidated financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Notes 3 and 4 of the consolidated financial statements, the Partnership has suffered recurring losses from operations, has a working capital deficiency, has defaulted on certain debt, and has no assurance of any financial support from the General Partners. These conditions raise substantial doubt about the Partnership's ability to continue as a going concern and to realize its plan to sell or otherwise dispose of its remaining properties by October 18, 1997. Management's plans regarding these matters are described in the Summary of Significant Accounting Policies and Note 3. The consolidated financial statements and schedule do not include any adjustments that might result from the outcome of these uncertainties.
		BDO Seidman, LLP
Atlanta, Georgia March 1, 1996
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Consolidated Balance Sheets
					 December 31, 1995 1994
Assets
Current Cash and cash equivalents (Note 12) $ 628,543 $ 820,321 Patient accounts receivable and third party settlements, net of allowance for doubtful accounts of $72,978 (Note 11) 477,805 367,145 Prepaid expenses and other 18,529 37,952 Property held for sale (Notes 4, 6 and 7) 744,147 3,268,042
Total current assets 1,869,024 4,493,460
Other Restricted escrow and other deposits (Note 4 49,241 329,589 Note receivable (Note 7) - 250,000 Deferred loan costs, net of accumulated amortization of $71,312 and $90,048 34,931 120,699 					 Total other assets 84,172 700,288
					 $1,953,196 $5,193,748
See accompanying summary of significant accounting policies and notes to consolidated financial statements.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Consolidated Balance Sheets
					 December 31, 1995 1994
Liabilities and Partners' Deficit
Current liabilities Mortgage debt obligations including debt in default of $1,763,962 and $4,683,405 (Note 4) $1,763,962 $4,683,405 Accounts payable and accrued expenses 156,102 112,059 Accrued compensation 126,004 144,832 Insurance payable 58,255 38,129 Accrued interest (Notes 1 and 4) 46,637 72,515 Accrued real estate taxes 43,376 18,833
Total current liabilities 2,194,336 5,069,773
Advances from affiliates and former affiliates (Notes 1 and 8) - 2,266,170
Total liabilities 2,194,336 7,335,943
Commitments and Contingencies (Notes 3, 4, 8, and 11)
Partners' equity (deficit) (Note 5) Limited partners 432,856 (1,403,484) General partners (673,996) (738,711)
Total partners' deficit (241,140) (2,142,195)
						 $1,953,196 $5,193,748
See accompanying summary of significant accounting policies and notes to consolidated financial statements.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Consolidated Statements of Operations
Years ended December 31, 1995 1994 1993
Revenue Operating revenue (Notes 7 and 11) $5,320,578 $4,997,231 $ 9,319,314 Interest income 29,587 73,854 43,816
Total revenue 5,350,165 5,071,085 9,363,130
Expenses Operating expenses (Note 7) 4,814,084 4,718,267 7,691,005 Interest expense (Notes 1 and 4) 445,608 453,979 642,391 Depreciation and amortization 302,419 324,202 607,138 Management fees (Note 2) 313,790 317,271 774,555 Real estate taxes 43,518 41,284 365,415 Partnership administration costs (Note 2) 173,452 179,060 171,660 Total operating costs and expenses 6,092,871 6,034,063 10,252,164 	 Operating loss (742,706) (962,978) (889,034) Gain on sale of properties (Note 7) 377,591 607,169 2,408,667 Income (loss) before extraordinary item (365,115) (355,809) 1,519,633 Extraordinary gain on extinguishment of debt (Notes 1, 8 and 9) 2,266,170 309,730 1,333,802 Net income (loss) $1,901,055 $(46,079) $2,853,435 Net income (loss) per limited partnership unit before extraordinary gain $(12.90) $(12.30) $ 58.25 Extraordinary gain from debt extinguishment 82.76 11.31 50.24 Net income (loss) per limited partnership unit $ 69.86 $ (0.99) $108.49 Distributions paid per limited partnership unit $ - $ 38.05 $ 28.54 Limited partnership units outstanding 26,283 26,283 26,283
See accompanying summary of significant accounting policies and notes to consolidated financial statements.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Consolidated Statements of Partners' Deficit Years Ended December 31, 1995, 1994 and 1993
	Total 	Partners' 	Limited General Deficit
Balance, at January 1, 1993 $(2,484,998) $(714,553) $(3,199,551) Net income 2,851,572 1,863 2,853,435 Distributions (Note 5) (750,000) - (750,000)
Balance, at December 31, 1993 (383,426) (712,690) (1,096,116) Net loss (20,058) (26,021) (46,079) Distributions (Note 5) (1,000,000) - (1,000,000)
Balance, at December 31, 1994 (1,403,484) (738,711) (2,142,195) Net income 1,836,340 64,715 1,901,055
Balance, at December 31 , 1995 $ 432,856 $(673,996) $ (241,140)
See accompanying summary of significant accounting policies and notes to consolidated financial statements.
Years ended December 31, 1995 1994 1993
Operating activities Net income (loss) $1,901,055 $(46,079) $2,853,435 Adjustments to reconcile net income (loss) to cash used in operating activities: Depreciation and amortization 302,419 324,202 607,138 Gain on sale of properties (377,591) (607,169) (2,408,667) Extraordinary gain on debt forgiveness (2,266,170) (309,730) (1,333,802) Changes in assets and liabilities: Accounts receivable (110,660) 270,172 11,011 Prepaid expenses and other 19,423 38,184 178,176 Other assets 80,511 3,743 35,055 Accounts payable and accrued liabilities 174,167 (34,444) (335,260) Cash used in operating activities (276,846) (361,121) (392,914)
Investing activities Additions to property held for sale (70,489) (74,263) - Payment for purchases of property and equipment - - (83,699) Net proceeds from sale of properties - 1,410,283 5,374,810 Proceeds from repayment of note receivable 250,000 - - Payment for settlement of obligations owed to former affiliates - - (425,000)
Cash provided by investing 	activities 179,511 1,336,020 4,866,111
Financing activities Principal payments on long term debt obligations (94,443) (148,398) (3,325,747) Distributions to limited partners - (1,000,000) (750,000) Cash proceeds from settlement - 76,342 -
Cash used in financing activities (94,443) (1,072,056) (4,075,747)
Net increase (decrease) in cash and cash equivalents (191,778) (97,157) 397,450
Cash and cash equivalents, beginning of year 820,321 917,478 520,028
Cash and cash equivalents, end of year $628,543 $820,321 $917,478
See accompanying summary of significant accounting policies and notes to consolidated financial statements.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Summary of Significant Accounting Policies
Organization
Consolidated Resources Health Care Fund IV (the "Partnership") was organized on August 10, 1984 as a Limited Partnership under the provisions of the Georgia Uniform Limited Partnership Act for the purpose of acquiring, operating and holding for investment and future capital appreciation income producing, healthcare related real properties.
The General Partners of the Partnership are WelCare Consolidated Resources Corporation of America, ("WCRCA" or the "Corporate General Partner"), a Nevada corporation, WelCare Service Corporation-IV as managing general partner ("WSC- IV" or the "Managing General Partner"), a Georgia corporation, and Consolidated Associates IV ("CA-IV"), a Georgia general partnership (collectively the "General Partners"). WCRCA and WSC-IV are wholly-owned subsidiaries of WelCare Acquisition Corp., which in turn, is a subsidiary of WelCare International, Inc. ("WelCare"). WelCare, a privately owned Georgia corporation, is engaged in the operation, acquisition, property management and oversight management of long-term care facilities. Consolidated Associates IV is composed of WCRCA, as the managing general partner, and individuals who were associated with Consolidated Resources Corporation of America ("CRCA"). Pursuant to an agreement dated October 30, 1985, CRCA, a Georgia corporation that initially was the Corporate General Partner of the Partnership, was merged into a subsidiary of Southmark Corporation ("Southmark"). The name of the surviving Southmark subsidiary was then changed to Southmark Consolidated Resources Corporation of America ("SCRCA"). Southmark emerged from Chapter 11 bankruptcy on August 10, 1990 and is liquidating most of its assets under its plan of reorganization. On November 20, 1990, WelCare Acquisition Corp. acquired from Southmark all the stock of SCRCA whose name was then changed to WelCare Consolidated Resources Corporation of America. Effective January 1992, WSC-IV, was added as the Managing General Partner to the Partnership.
A majority in interest of the Partnership's Limited Partners approved a proposal, on October 18, 1994, which provides for the sale of all of the Partnership's remaining assets and the eventual dissolution of the Partnership, as outlined in a proxy statement dated September 28, 1994. Under the approved proposal, the Limited Partners consented for the Managing General Partner to attempt to sell or otherwise dispose of its remaining properties prior to October 18, 1997. Upon the disposition of all of its assets, the approved proposal requires that the Managing General Partner dissolve the Partnership.
As discussed in Item 8, Note 4, the Partnership's two mortgage debt obligations were in technical default as of December 31, 1995. These obligations mature April 1, 1996. The Partnership is currently seeking an extension from the lender to allow for the sale of the facilities.
The Partnership will continue to operate the facilities and plans to negotiate an extension with its lenders while it proceeds with the sale of its properties.
At December 31, 1995, the Partnership has held available for sale all of its nursing home facilities. Accordingly, the Partnership has classified the facilities as property held for sale in the accompanying balance sheet.
The consolidated financial statements do not reflect assets the partners may have outside their interests in the Partnership, nor any personal obligations, including income taxes, of the individual partners.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Summary of Significant Accounting Policies
Consolidation
The consolidated financial statements include the accounts of the Partnership and the partnership in which it holds a majority interest. All significant intercompany balances and transactions have been eliminated. The amount of minority interest is immaterial.
Property Held for Sale
Property held for sale at December 31, 1995, consists of two nursing home facilities owned by the Partnership. In accordance with a plan approved by the Limited Partners on October 18, 1994, the Managing General Partner has been given permission to either sell or otherwise dispose of the Partnership's assets by October 18, 1997. Property held for sale at December 31, 1994 consisted of three nursing home facilities owned by the Partnership. As discussed in Note 7, one of these facilities was sold in October 1995.
The Financial Accounting Standards Board has issued Statement on Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). The Company will adopt this standard in Fiscal 1996. In management's opinion, there will be no material effect on the Company's financial statements of adopting SFAS No. 121.
Depreciation and Amortization
Property and equipment are depreciated using the straight-line method over lives of 5 to 30 years. Amortization of leased assets is included in depreciation and amortization expense. Renewals and betterments are capitalized and repairs and maintenance are charged to operations as incurred.
Deferred Loan Costs
Deferred loan costs are amortized over the terms of the respective loans using the straight-line method. Amortization of deferred loan costs is included in depreciation and amortization expense.
Operating Revenue
Operating revenue is recorded when services are rendered and includes amounts reimbursable by Medicaid and Medicare. Medicare revenue is recorded at the applicable net reimbursement rates; therefore, no contractual adjustments are reported.
Income Taxes
No provision has been made in the financial statements for Federal income taxes because under current law, no Federal income taxes are paid directly by the Partnership. The Partnership reports certain transactions differently for tax and financial statement purposes.
Allocation of Net Income or Net Loss
The Partnership's net profits and net losses (other than net profits or net losses from a sale or refinancing of Partnership property) are allocated 96% to the Limited Partners and 4% to the General Partners. Distributions are allocated on the basis described in Note 5.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Summary of Significant Accounting Policies
Net profits and losses resulting from a sale or refinancing shall be allocated 99% to the Limited Partners and 1% to the General Partners. Net profits resulting from a sale or refinancing shall be allocated in the following order: (a) First, 1% to the General Partners and 99% to the Limited Partners until the net profits allocated to the Limited Partners from such sale or refinancing equals the excess of the greater of the following items over their capital account immediately prior to such sale or refinancing:
a) zero; or
b) the Limited Partners' invested capital immediately prior to such sale or refinancing plus 9% per annum of the Limited Partners' average invested capital for all fiscal years to the extent not received through prior distributions of distributable cash from operations or sale or refinancing proceeds; or
c) the amount of sale or refinancing proceeds distributable to the Limited Partners;
(b) Second, to the General Partners until the net profits allocated to the General Partners from such sale or refinancing equals the excess of the greater of the following items over their capital account immediately prior to such sale or refinancing:
a) zero; or
b) the amount of sale or refinancing proceeds distributable to the General Partners from such sale or refinancing;
(c) Third, any remaining net profits shall be allocated 15% to the General Partners and 85% to the Limited Partners.
Net Income (Loss) Per Limited Partnership Unit
Net income (loss) per Limited Partnership Unit is computed by dividing net income (loss) allocated to the Limited Partners by the number of Limited Partnership units outstanding.
Reclassifications
Certain 1994 and 1993 amounts have been reclassified to conform to the 1995 presentation.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Summary of Significant Accounting Policies
Statements of Cash Flows
For purposes of this statement, cash equivalents include bank repurchase agreements backed by U.S. Government Securities, U.S. Treasury Obligations and money market funds.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
1. Transactions With Former Affiliates
The Partnership paid property management fees based on a percentage of gross property operating revenues to National Heritage, Inc. ("NHI"), a former affiliate of Southmark, for supervising the maintenance and operations of the Partnership's properties. At the beginning of 1991, all seven of the Partnership's nursing homes were managed by NHI. During 1991, one of the facilities was sold and a company that is unaffiliated with WelCare, Southmark or NHI assumed management of another facility. Also, during 1991, the Partnership terminated NHI as manager of three more facilities and effective January 31, 1992, the Partnership terminated NHI as manager of the remaining two facilities. NHI provided accounting services for a varying number of homes through September 30, 1993. For services provided during its management period, fees paid to NHI ranged from 1% to 2% of operating revenues for accounting services and 4% to 5% of operating revenues for management services.
In December 1991, NHI, through a lawsuit, sought to take possession of certain of the Partnership's properties. In 1993, the Partnership and NHI reached an agreement which settled all lawsuits and claims (See Note 9). In connection with this settlement, the Partnership retained possession of all of the properties.
Amounts claimed payable to former affiliates (primarily Southmark and the Corporate General Partner) totalled $2,266,170 including accrued interest, at December 31, 1994, and are classified as Advances from affiliates and former affiliates on the 1994 balance sheet. In July 1991, Southmark filed suit demanding payment of these alleged advances. In 1991, after WelCare's affiliate acquired the Corporate General Partner, it challenged the validity of these payables through claims filed against the Southmark Bankruptcy Estate. In February 1994, the suits were settled whereby the Partnership was released of all liabilities to Southmark (see Note 8). Accordingly, during 1995 and 1994, the Partnership recorded a gain on debt extinguishment related to this settlement totalling $2,266,170 and $309,730, respectively. Amounts included in the gain on debt forgiveness in 1994 include payables to Southmark and former affiliates of Southmark of $233,388 plus settlement proceeds paid to the Partnership by Southmark totalling $76,342. In 1995, the Corporate General Partner released the Partnership from all remaining liabilities resulting in a gain on debt forgiveness of $2,266,170.
2. Management Fees and Affiliate Transactions
An affiliate of the Corporate General Partner was responsible for management of three facilities as of December 31, 1991, and assumed responsibility for two additional facilities effective January 31, 1992. During 1994 and 1995, the affiliate of the Corporate General Partner received a fee of 6 % of gross operating revenues on the facilities that the affiliate managed.
During 1995, 1994 and 1993, the affiliate of the Corporate General Partner received oversight fees and management fees from the Partnership amounting to $313,790, $317,271 and $351,882, respectively, and was reimbursed for costs incurred in connection with the administration of Partnership activities of $58,176, $55,928 and $59,762, respectively. The reimbursed costs are included in the Partnership administration costs on the Statements of Operations.
During 1993, an affiliate of the Corporate General Partner advanced funds to a subsidiary of the Partnership to pay off the bond financing secured by Heritage Manor of Hiawatha. These advances were repaid when the facility was sold. Total interest paid on these advances during 1993 was $30,287, which accrued at 7%. Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
3. Going Concern
The Partnership's consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At December 31, 1995, the Partnership has experienced working capital deficiencies, had defaulted on certain debt obligations and had no assurance of any financial support from the General Partners.
The Partnership's continued existence is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to comply with the terms of its financing agreements, and to obtain additional financing as may be required. The Partnership is in the process of seeking buyers for its two remaining facilities. Debt obligations secured by these facilities matured April 1, 1996. The Partnership is currently seeking an extension of the due date on these obligations. The inability to obtain extensions could result in foreclosure and a loss of the facilities. The Partnership does not anticipate improved liquidity during the remainder of 1996. Should the Partnership's cash reserves prove inadequate, the Partnership has no existing lines of credit to draw on, or the ability to increase its borrowings on its two remaining facilities.
4. Mortgage Obligations
Mortgage debt obligations consisted of:
	1995 1994
9.6% note related to Heritage Manor of Emporia, collateralized by real estate with recourse to other assets of the Partnership, payable in monthly installments of principal and interest of $16,215, due April 1, 1996. $1,115,192 $1,174,905
9.6% note related to Heritage Manor of Hoisington, collateralized by real estate with recourse to other assets of the Partnership, payable in monthly installments of principal and interest of $9,194, due April 1, 1996. 648,770 683,500
10.25% First Mortgage Revenue Bonds, related to The Oaks of Mountain Grove, retired in October 1995 in conjunction with the sale of the Oaks of Mountain Grove. - 2,825,000
					 $1,763,962 $4,683,405
The Partnership was in default on the mortgage debt related to Heritage Manor of Hoisington and Heritage Manor of Emporia at December 31, 1995 and 1994 due to failure to maintain certain minimum debt service escrow balances. As a result, these obligations are classified as current liabilities in the accompanying balance sheets for 1995 and 1994.
At December 31, 1995 and 1994, substantially all property held for sale is held as collateral for mortgage debt obligations.
The Partnership paid interest of $471,486, $430,665 and $800,379 in 1995, 1994 and 1993, respectively.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
Due to the default provisions described above, it is not practical to estimate the fair value of the Partnership's mortgage obligations.
5. Distributions
Distributions to the Partners are paid from operations of the Partnership's properties, or from sales or refinancing of properties. Cash from operations is distributed 96% to the Limited Partners and 4% to the General Partners. However, no distributions of cash from operations may be made to the General Partners in any year until the Limited Partners have received distributions for such year equal to 9% of their invested capital.
Distributions of cash from sales and refinancing are made in the following order:
(a) first to the Limited Partners in an amount equal to their invested capital; then,
(b) to the Limited Partners in an amount necessary to provide the Limited Partners with a 9% cumulative, non-compounded return on invested capital to the extent not previously received through distributions of distributable cash from operations; then,
(c) to the General Partners in an amount up to 3% of the sales price of all properties on a cumulative basis; then,
(d) the balance 15% to the General Partners and 85% to the Limited Partners.
Due to improvements in operations obtained after WelCare's affiliate acquired the Corporate General Partner, the Corporate General Partner caused the Partnership to distribute $150,000 to the Limited Partners during 1991. No distributions were made in 1992. During 1993, the Partnership distributed $750,000 of proceeds from facility sales (see Note 7). During 1994, the Partnership distributed $1,000,000 of proceeds from the sale of the Rainbow Springs facility (see Note 7). No distributions were made during 1995. Cumulative distributions paid to the Limited Partners as of December 31, 1995 were $5,446,590. There have been no distributions to the General Partners.
6. Property Held for Sale and Loss from Write-Down of Properties
The Partnership recorded write-downs in prior years to reduce the carrying value of certain properties to their estimated net realizable value as determined by the Corporate General Partner. These writedowns were as follows as of December 31, 1995:
							 1995 1994
Heritage Manor of Emporia $1,317,825 $1,317,825 Heritage Manor of Hoisington 447,506 447,506 Heritage Manor of Mountain Grove(1) - 470,941 						 $1,765,331 $2,236,272 (1) Property was sold in 1995
Property held for sale at December 31 1995, consisted of the Partnership's two nursing home facilities. At December 31, 1994, Property held for sale also included the net book value of property and equipment of The Oaks of Mountain Grove, which was sold in 1995 (See Note 7).
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
Heritage Manor of Emporia $431,140 Heritage Manor of Hoisington 313,007 				 $744,147
7. Property Dispositions
The Oaks of Mountain Grove ("Mountain Grove") was sold effective October 18, 1995, and a gain of $377,591 was recognized. Under the terms of the agreement, the purchaser acquired all the assets except patient receivables, Medicaid receivables and Medicare receivables through the closing, and assumed bonds payable of $2,825,000 and accrued interest thereon. In connection with the sale, the Partnership paid cash of $45,697, which included closing costs and certain accrued operating expenses. During the period January 1 through October 18, 1995, Mountain Grove earned approximately $2,275,000 in revenues and incurred approximately $2,115,000 in expenses.
The Partnership sold its interest in Heritage Manor of Hiawatha ("Hiawatha") and Kent's Nursing Care Center ("Kent's") pursuant to a purchase and sale agreement dated as of October 1, 1993. These facilities were sold for $3,900,000, of which $3,150,000 was allocated for Kent's and $750,000 for Hiawatha. Each of these facilities was sold for a purchase price that equaled or exceeded the appraised value of the facility. The Partnership received gross proceeds of $3,750,000 and a note from the Purchaser in the amount of $200,000 which was repaid in 1994. The Partnership recognized a total gain of approximately $2,076,000 from the sale, $1,886,000 and $190,000 from Kent's and Hiawatha, respectively.
During the nine month period ended September 30, 1993, Kent's earned approximately $1,737,000 in revenue and incurred approximately $1,668,000 in expenses. During the same period, Hiawatha earned approximately $903,000 in revenue and incurred approximately $1,075,000 in expenses.
On April 1, 1993, River Oaks Care Center ("River Oaks") was sold in a transaction whereby the purchaser acquired the facility and rights to its net operating cash flow for the period from January 1, 1993 through March 31, 1993. A gain of $332,913 was recognized by the Partnership from the sale. The Partnership received cash of $590,000 (net of $10,000 in closing costs). During the three month period ended March 31, 1993, River Oaks earned approximately $602,000 in revenues and incurred the same amount of expenses.
Heritage Manor of Red Boiling Springs was sold effective April 30, 1991, and a loss of $26,521 was recognized. The total sales price was $2,950,000. The Partnership received cash of $1,115,000 and a note receivable from the purchaser for $250,000 (quarterly interest payments are due with interest at the rate of 11% per annum, with principal and any unpaid accrued interest due April 30, 1996). The note receivable was collected in September 1995.
In 1989, the joint owner of Rainbow Springs filed for bankruptcy protection. Rainbow Springs was auctioned for sale by the bankruptcy court with jurisdiction over this joint owner on January 31, 1994. The sale was closed on March 31, 1994 at a sales price of $4,200,000. Under the allocation of proceeds, the Partnership received proceeds of $1,410,283 (net of delinquent real estate taxes totalling $1,213,468) and recognized, a gain on sale of $607,169.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
8. Southmark Litigation
In November 1990, the Partnership filed claims against Southmark in the United States Bankruptcy Court for the Northern District of Texas. In August 1991, the Partnership was served notice that on July 12, 1991, Southmark filed suit against the Partnership, the Corporate General Partner, partnerships controlled by affiliates of the Corporate General Partner and partnerships and corporations which are unaffiliated with the Partnership or the Corporate General Partner. The suit was also filed in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. On October 15, 1991, the Partnership filed its response, including counterclaims against Southmark, for alleged fraud and misrepresentation and asserting that in fact Southmark owed amounts to the Partnership as represented by Proof of Claims filed against Southmark's bankruptcy estate.
The Partnership and Southmark reached a settlement agreement effectively filed with the Bankruptcy Court in January 1994, regarding the claims filed by the Partnership against Southmark and Southmark's suit against the Partnership. Under this settlement agreement, Southmark releases all claims against the Partnership and recognized the Partnership's claims. In settlement of the Partnership's claims, Southmark paid $76,345 to the Partnership in 1994.
9. NHI Settlement
The Partnership had filed a lawsuit against NHI seeking to void all promissory notes from the Partnership to NHI. NHI had also brought suit against the Partnership seeking payment of the notes and mortgage foreclosure. In October 1993, the Partnership reached a settlement of all matters between the Partnership and NHI. NHI agreed to accept $425,000 as full settlement of all matters outstanding, including workers' compensation liabilities of $415,246, secured notes of $750,000, accrued interest of $445,271 and other liabilities of $148,285. In connection with this settlement, NHI discontinued the performance of accounting services for Heritage Manor of Hoisington (See Note 1).
10. Workers' Compensation
The Partnership's facilities participated in a self-insured program for workers' compensation liability insurance through July 1989, covering all facilities managed by NHI. The Partnership had satisfied this obligation as part of the settlement with NHI (See Note 9) as of December 31, 1993.
11. Cost Reimbursements
Accounts receivable and operating revenue include amounts estimated by management to be reimbursable by Medicaid under the provisions of cost reimbursement formulas in effect. Final determination of amounts earned is subject to audit by the intermediaries. In the opinion of management, adequate provision has been made for any adjustments that may result from such audits. Differences between estimated provisions and final settlement are reflected as charges or credits to operating revenue in the year finalized. Medicaid accounted for approximately 49%, 51% and 55% of operating revenue during 1995, 1994 and 1993, respectively.
Significant changes have and will continue to be made in government reimbursement programs, and such changes could have a material impact on future reimbursement formulas.
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Notes to Consolidated Financial Statements
Accounts receivable are recorded at net realizable value and relate principally to amounts due from various state Medicaid programs. Receivables from these programs were approximately as follows:
							 1995 1994
Kansas $110,000 $122,000 Missouri 75,000 132,000
Amounts due from Medicaid programs are usually paid on an interim and final basis, depending on the state, generally within 30 to 60 days from date of billing.
12. Concentration of Credit Risk
At December 31, 1995, the Partnership had cash invested in U.S. Treasury Obligations totalling $200,000 and cash on deposit with a bank which exceeded Federal Deposit Insurance Corporation limits by $721,005.
13. Supplemental Disclosures of Cash Flow Information
As discussed in Note 1, the Partnership had a forgiveness of debt due to the Corporate General Partner during 1995. In connection with the forgiveness, a gain of $2,266,170 was recorded.
The above amount is included in the extraordinary gain of debt forgiveness on the accompanying statement of cash flows.
As a part of the sale of The Oaks of Mountain Grove described in Note 7, the following assets and liabilities were excluded from the statement of cash flows for the year ended December 31, 1995:
Accounts receivable $155,445 Accounts payable (47,762)
Cash of disposed property $107,683
SCHEDULES
Consolidated Resources Health Care Fund IV and Subsidiaries (limited partnerships)
Schedule II - Valuation and Qualifying Accounts Years Ended December 31, 1995, 1994 and 1993
			 Additions 	 Balance at charged to 	 beginning of costs and Balance at 		 year expenses Deductions(1) end of year Allowance for doubtful accounts $ 72,978 $ - $ - $72,978
Allowance for doubtful accounts $ 80,864 $9,754 $(17,640) $72,978
Allowance for doubtful accounts $166,742 $- $(85,878) $80,864
(1) Represents direct write-offs of receivables.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 	ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership does not have officers or directors. At December 31, 1991, the General Partners of the Partnership were WelCare Consolidated Resources Corporation of America ("WCRCA"), and Consolidated Associates IV. Effective January 7, 1992, WSC-IV was added as Managing General Partner of the Partnership. The executive officers and director of WSC-IV and WCRCA, who control the affairs of the Partnership, are as follows:
Name and Position Age Other Principal Occupations and Other 			 Directorships During the Past 5 Years
J. Stephen Eaton Mr. Eaton has been President and Director of President and 45 WelCare International, Inc. since its formation in Director February 1989. WelCare International, Inc., an 			 affiliate of the General Partners, is engaged in 			 the operation, acquisition, property management 			 and oversight management of long-term care 			 facilities. Since 1988, Mr. Eaton has served as a 			 Director and is currently Chairman of St. Joseph's 			 Mercy Care Corporation, a non-profit corporation.
Kent C. Fosha, S 54 Mr. Fosha has been Executive Vice President of Executive Vice WelCare International, Inc. since 1990. WelCare President International, Inc., an affiliate of the General Operations Partners, is engaged in the operation, 			 acquisition, property management and oversight 			 management of long-term care facilities. Mr. 			 Fosha is a licensed nursing home administrator in 			 the state of Georgia.
Alan C. Dahl 35 Mr. Dahl has been Executive Vice President of Executive Vice WelCare International, Inc. since February 1991. President WelCare International, Inc., an affiliate of the 			 General Partners, is engaged in the operation, 			 acquisition, property management and oversight 			 management of long-term care facilities. Mr. Dahl 			 is a certified public accountant.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
No individual principal or principals as a group received any direct remuneration from the Partnership.
The General Partners are not compensated directly for their services as general partners of the Partnership. See Item 13 and Item 8, Note 2 for further discussion of compensation paid to affiliates of the General Partners.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(A) Security ownership of certain beneficial owners.
No individual or group as defined by Section 13(d)(3) of the Securities Exchange Act of 1934, known to the Partnership is the beneficial owner of more than 5% of the Partnership's securities.
(B) Security ownership of management.
The General Partners and their management own less than 1%.
The General Partners are entitled to distributions of cash from operations and from "other sources" (primarily from the sale or refinancing of Partnership properties, as set forth in Item 8, Note 4).
(C) Change in control.
	None.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Affiliates and former affiliates of the General Partners, in accordance with the Partnership Agreement, may receive compensation for services rendered. The following is a summary of compensation paid to or accrued for the benefit of the General Partners and affiliates in 1995:
Oversight management and management fees $313,790 Administration of partnership activities (1) 58,176
(1) For reimbursement of expenses incurred by the Corporate General Partner in performing certain administrative functions, including investor relations and accounting.
See Note 2 to the accompanying consolidated financial statements appearing in Item 8.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
	(1) Consolidated Financial Statements:
		Report of Independent Certified Public Accountants
		Balance Sheets 			as of December 31, 1995 and 1994
		Statements of Operations 			for the Years Ended December 31, 1995, 1994 and 1993
		Statements of Partners' Deficit 			for the Years Ended December 31, 1995, 1994 and 1993
		Statements of Cash Flows 			for the Years Ended December 31, 1995, 1994 and 1993
		Summary of Significant Accounting Policies
		Notes to Consolidated Financial Statements
		Schedule included in Part II, Item 8:
		Schedule II - Valuation and Qualifying Accounts 			for the Years Ended December 31, 1995, 1994 and 1993
Other schedules are omitted since they are not required, are not applicable or the financial information required is included in the financial statements or notes thereto.
	(2) Exhibits:
The following exhibits are incorporated by reference and are an integral part of this Form 10-K.
Exhibit Number (as per Exhibit Table) Document Description 	 2.1 Liquidation Proposal incorporated by reference to the Proxy Statement filed on September 28, 1994 file 0-14435. 	 3.1 Amended and Restated Agreement of Limited Partnership of Consolidated Resources Health Care Fund IV incorporated by reference to Exhibit A to the Registration Statement on Form S-1, Page A-1, File No. 2-93219. 	 3.2 Amendment to Amended and Restated Agreement of Limited Partnership of Consolidated Resources Health Care Fund IV incorporated by reference to Exhibit A to Proxy Statement filed on November 19, 1991, File No. 0-14435. 	 22 Subsidiaries 	 27 Financial Data Schedules
(b) Reports on Form 8-K
	(1) None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
	CONSOLIDATED RESOURCES HEALTH CARE FUND IV 	(Registrant) 	 	By: WELCARE CONSOLIDATED RESOURCES 	CORPORATION OF AMERICA 	Corporate General Partner 	 	By:/S/ J. Stephen Eaton Date J. Stephen Eaton, 	President 	 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated: 	 	 	By:/S/ J. Stephen Eaton Date J. Stephen Eaton, 	Sole Director and Principal 	Executive Officer of the 	Corporate General Partner 	 	By:/S/ Alan C. Dahl Date Alan C. Dahl 	Chief Financial Officer of the Corporate 	General Partner
Exhibit Index
Exhibit Number Description Sequential Page Number 		 3.1 Amended and Restated Agreement of Limited 	Partnership of Consolidated Resources 	 Health Care Fund IV incorporated by 	 reference to Exhibit A to the Registration 	 Statement on Form S-1, Page A-1, File 	 No. 2-93219. N/A 		 3.2 Amendment to Amended and Restated Agreement 	 of Limited Partnership of Consolidated Resources 	 Health Care Fund IV incorporated by reference 	 to Exhibit A to Proxy Statement filed on 	 November 19, 1991, File No. 0-14435. N/A 		 22 Subsidiaries 35 		 		 27 Financial Data Schedules N/A
Exhibit 22
SUBSIDIARY (LIMITED PARTNERSHIPS)
Hiawatha Healthcare, Ltd. (Inactive) Rainbow Springs Associates, L.P. (Inactive)