(Journal entries for hospitals)

Following is a trial balance for Darwin Memorial, a not-for-profit hospital:

During the 2004-2005 fiscal year, the following selected transactions took place:
1. Darwin had capitation agreements with several HMOs, wherein the HMOs agreed to pay monthly premiums per member at the beginning of every month in exchange for Darwin's agreement to provide hospital services to the $\mathrm{HMO}$ members. Darwin received premiums of $\$ 2$ million in cash during the year. In addition, Darwin billed its self-pay patients a total of $\$ 100,000$.
2. Several self-pay patient accounts were classified as uncollectible and written off. These accounts totaled $\$ 2,000$.
3. The MVT Corporation gave the hospital a grant for research into the use of a verbally operated microscope. The grant was for $\$ 500,000$. The entire amount was immediately invested in marketable securities.
4. Operating expenses were incurred as follows:

Assume that all expenses were incurred on credit.
5. Self-pay patient receivables of $\$ 110,000$ were collected.
6. Accounts payable of $\$ 1,400,000$ were paid.

7. Several individuals in the community contributed a total of $\$ 1$ million for the expansion of the burn unit of the hospital. This money was invested in marketable securities until the plans for the unit were completed. The fund was titled the Burn Unit Fund.
8. Debt service of $\$ 210,000$ on the outstanding debt was paid in cash. Of this amount, $\$ 110,000$ was for interest and the rest was for debt principal.
9. The managing board decided to establish a fund for the development of its professional staff. The amount transferred from general hospital resources was $\$ 25,000$. The new fund was called the Professional Improvement Fund.
10. The construction and planning costs incurred on the new burn unit totaled $\$ 200,000$. This amount was paid from the Burn Unit Fund cash account. To make these payments, investments that originally cost $\$ 190,000$ were sold for $\$ 205,000$. In addition, $\$ 10,000$ cash income was received on the investments. Assume that the income from the investments has the same restrictions as the original donation.
11. During the year, the hospital received $\$ 25,000$ cash income from the investment of the MVT grant money. Assume that the investment income is restricted in the same way as the original grant.
12. Research costs associated with the MVT grant were $\$ 20,000$. These costs were paid with cash generated by the investment of the original grant.
13. Jane Doe gave the hospital $\$ 15,000$, which must be maintained intact. The income from the gift can be used in any way the managing board feels is helpful to the hospital. The money was immediately invested in marketable securities.
14. Investments in the Jane Doe Fund earned $\$ 2,000$ during the year. Of this amount $\$ 1,900$ was received in cash.
15. The fair value of the remaining investments in the Burn Unit Fund at the end of the year was $\$ 850,000$.
Required: Prepare all the journal entries necessary to record these transactions and identify the fund or funds involved.

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Darwin Memorial Hospital General Fund Trial Balance Cash Patient accounts receivable Allowance for uncollectible patient accounts Land Buildings July 1, 2004 $ 12,000 40,000 $ 4,000 600,000 2,500,000 650,000 2,000,000 400,000 15,000 100,000 Accumulated depreciation-building Equipment Accumulated depreciation-equipment Accounts payable Notes payable Bonds payable Unrestricted net assets 2,000,000 1,983,000 $5,152,000 $5,152,000