A local private not-for-profit health care entity (Rochester Medical) incurred the following transactions during the current...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A local private not-for-profit health care entity (Rochester Medical) incurred the following transactions during the current year. The entity has one program service (health care) and two supporting services (fundraising and administrative). a. The board of governors for Rochester Medical (RM) announces that $160,000 in previously unrestricted cash will be used in the near future to acquire equipment. These funds are invested until the purchase eventually occurs. b. RM receives a donation of $80,000 in cash with the stipulation that the money be invested in U.S. government bonds. All subsequent income derived from this investment must be paid to supplement nursing salaries. c. RM spends $42,000 in cash to acquire medicines. RM had received this money during the previous year. The donor had specified that it had to be used for medicines. d. RM charges patients $2 million. These amounts are the responsibility of government programs and insurance companies. These third-party payors will receive explicit price concessions because of long standing contracts. Officials believe RM has an 80 percent chance of receiving $1.5 million and a 20 percent chance of receiving $1.0 million. RM has a policy of reporting the most likely outcome. e. RM charges patients $1 million. These patients are not insured. RM sets implicit price concessions because of the high cost of health care. Officials believe RM has a 70 percent chance of collecting $250,000 and a 30 percent chance of receiving $100,000. As stated before, RM has a policy of reporting the most likely outcome. f. RM charges patients $600,000. These patients have little or no income. The hospital administration chooses to view this work as charity care and make no attempt at collection. g. Depreciation expense for the year is $110,000. Of that amount, 70 percent relates to health care, 20 percent to administrative, and 10 percent to fundraising. h. RM receives interest income of $15,000 on the investments acquired in (a). i. Based on past history, officials estimate that $67,000 of the reported receivable amount from third-party payors will never be collected. Of the amount reported by uninsured patients who are expected to pay a portion of their debt, officials estimate that $20,000 of the reported receivable amount will not be collected. The medicines in (c) are consumed through daily patient care. j. RM sells the investments in (a) for $189,000 in cash. RM used that money plus the previously recorded interest income (along with $25,000 in cash given last year to RM with the donor stipulation that the money be used for equipment) to buy new equipment. k. RM receives pledges near the end of the year totaling $200,000. Of that amount, $38,000 is judged to be conditional. The remaining $162,000 has a donor-stipulated purpose restriction. The present value of the $162,000 is calculated as $131,000. b. Prepare a schedule calculating the change in net assets without donor restrictions and net assets with donor restrictions. (Negative amounts should be indicated by a minus sign. Enter your answers in dollars not in millions of dollars.) Contribution revenue Patient service revenues Interest income Gain on sale of investments Reclassified from net assets with donor restrictions to net assets without donor restrictions Contributions, revenues, and reclassifications Expenses Healthcare Depreciation Bad debts Pharmaceutical Administrative Depreciation Fundraising Depreciation Total expenses Increase in net assets. Assets Without Assets With Donor Restrictions Donor Restrictions $ 0 0 0 0 $ 0 0 0 A local private not-for-profit health care entity (Rochester Medical) incurred the following transactions during the current year. The entity has one program service (health care) and two supporting services (fundraising and administrative). a. The board of governors for Rochester Medical (RM) announces that $160,000 in previously unrestricted cash will be used in the near future to acquire equipment. These funds are invested until the purchase eventually occurs. b. RM receives a donation of $80,000 in cash with the stipulation that the money be invested in U.S. government bonds. All subsequent income derived from this investment must be paid to supplement nursing salaries. c. RM spends $42,000 in cash to acquire medicines. RM had received this money during the previous year. The donor had specified that it had to be used for medicines. d. RM charges patients $2 million. These amounts are the responsibility of government programs and insurance companies. These third-party payors will receive explicit price concessions because of long standing contracts. Officials believe RM has an 80 percent chance of receiving $1.5 million and a 20 percent chance of receiving $1.0 million. RM has a policy of reporting the most likely outcome. e. RM charges patients $1 million. These patients are not insured. RM sets implicit price concessions because of the high cost of health care. Officials believe RM has a 70 percent chance of collecting $250,000 and a 30 percent chance of receiving $100,000. As stated before, RM has a policy of reporting the most likely outcome. f. RM charges patients $600,000. These patients have little or no income. The hospital administration chooses to view this work as charity care and make no attempt at collection. g. Depreciation expense for the year is $110,000. Of that amount, 70 percent relates to health care, 20 percent to administrative, and 10 percent to fundraising. h. RM receives interest income of $15,000 on the investments acquired in (a). i. Based on past history, officials estimate that $67,000 of the reported receivable amount from third-party payors will never be collected. Of the amount reported by uninsured patients who are expected to pay a portion of their debt, officials estimate that $20,000 of the reported receivable amount will not be collected. The medicines in (c) are consumed through daily patient care. j. RM sells the investments in (a) for $189,000 in cash. RM used that money plus the previously recorded interest income (along with $25,000 in cash given last year to RM with the donor stipulation that the money be used for equipment) to buy new equipment. k. RM receives pledges near the end of the year totaling $200,000. Of that amount, $38,000 is judged to be conditional. The remaining $162,000 has a donor-stipulated purpose restriction. The present value of the $162,000 is calculated as $131,000. b. Prepare a schedule calculating the change in net assets without donor restrictions and net assets with donor restrictions. (Negative amounts should be indicated by a minus sign. Enter your answers in dollars not in millions of dollars.) Contribution revenue Patient service revenues Interest income Gain on sale of investments Reclassified from net assets with donor restrictions to net assets without donor restrictions Contributions, revenues, and reclassifications Expenses Healthcare Depreciation Bad debts Pharmaceutical Administrative Depreciation Fundraising Depreciation Total expenses Increase in net assets. Assets Without Assets With Donor Restrictions Donor Restrictions $ 0 0 0 0 $ 0 0 0
Expert Answer:
Answer rating: 100% (QA)
To calculate the change in net assets without donor restrictions and net assets with donor restrictions we need to summarize the revenues expenses and ... View the full answer
Related Book For
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
A local private not-for-profit health care entity (Rochester Medical) incurred the following transactions during the current year. Record each of these transactions in appropriate journal entry form....
-
A local private not-for-profit health care entity incurred the following transactions during the current year. Record each of these transactions in appropriate journal entry form. Prepare a schedule...
-
A local private not-for-profit health care entity incurred the following transactions during the current year. a. The entitys governing board announced that $177,000 in previously unrestricted cash...
-
How do business plan for successful import and export activity?
-
Critically evaluate the key features of literature based which is on Tourism and Hospitality?
-
Before Adjustment Given: Accrued Salaries, $50. a. Complete a transaction analysis box for this adjustment. b. What will be the balance of these two accounts on the adjusted trialbalance? Salaries...
-
Audit Risk Model. Sonya Bagri, Chartered Accountant (CA), is auditing the sales of Barlaam Books, which owns two retail book stores in New Delhi. She has decided to allow only 25 incomplete sales...
-
Dan Murphy awoke at 5:45 A.M., just like he did every workday morning. No matter that he went to sleep only four hours ago. The Orange Bowl game had gone late into the evening, and the New Years Day...
-
What is the present value of the following annuity? $4,618 every year at the end of the year for the next 6 years, discounted back to the present at 4.96 percent per year, compounded annually? round...
-
The Kentucky Derby is held the first Saturday in May at Churchill Downs in Louisville, Kentucky. The race track is one and one-quarter miles. The following table shows the winners since 2000, their...
-
Let In+1 = En +(2-en) If {n} converges, then what is lim En? (In-In-1)/(en-en-1) with x = 0 and = 1.
-
What are the key considerations when resolving conflicts in cross-cultural or international contexts, and how can cultural intelligence be leveraged to navigate these situations ?
-
What key considerations would you outline for Charles and Lisa to use in making a final decision about the value of a project manager and use of project techniques
-
1. What is the difference between an ethical choice and an ethical dilemma? 2. Were Boeing leaders and NASA officials faced with an ethical choice or an ethical dilemma? 3. What role does...
-
Describe the important ethical and managerial lessons suggested by the issues that arose in the construction of a new eastern span for the San Francisco Oakland Bay Bridge.
-
What are the ethical considerations surrounding teamwork, such as fairness in task allocation, recognition of individual contributions, and decision-making transparency, and how can teams ensure...
-
Itranscript Brianna is buying a house for $220,000. She plans to make a 18 % down payment. Closing costs include $700 for 6 months of homeowners insurance, $600 for 6 months of property tax, $125 for...
-
1. True or False. Pitfalls to consider in a statistical test include nonrandom samples, small sample size, and lack of causal links. 2. Because 25 percent of the students in my morning statistics...
-
The City of Ronchester has a defined benefit pension plan for its firefighters. How is the amount of pension expense determined that should be recognized in the current year?
-
According to the IASB, IFRS comprise interpretations issued by the SIC and IFRIC, and a. International financial reporting standards issued by the IASB only. b. International accounting standards...
-
On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 50,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as...
-
Research evidence suggests that, in practice, a cost-plus approach influences many pricing decisions. Required: What is meant by cost-plus pricing and what are the problems of using this approach? E-1
-
Jerry and Co. is a large computer consultancy business that has a division specialising in robotics. Can you identify three non-financial measures that might be used to help assess the performance of...
-
What are the reasons for holding inventories? Are these reasons different from the rea- sons for holding cash? R-3
Study smarter with the SolutionInn App