P 22-8 Journal entries—Nongovernmental not-for-profit health care organization The Fort Collins Health Center is a nongovernmental not-for-profit health care organization. During the current year, the following occurred:

1. Gross charges at established rates for services rendered to patients amounted to $102,300. The clinic had contractual adjustments with insurers and Medicare of $30,000. Bad debts are estimated at 2 percent of gross charges.

2. The health center receives premium revenue from capitation agreements totaling $54,000.

Accounting for Not-for-Profit Organizations 773 3. The center also receives revenue of $16,000 from the pharmacy housed in its building.

4. The center paid salaries and wages allocated to functional categories as follows: nursing services,

$35,000; other professional services, $11,000; general services, $10,000; fiscal services, $2,000;

and administrative services, $20,000.

5. The health center receives a federal grant for $12,000. The money must be used for medical equipment.

6. Supplies costing $13,000 were purchased during the month, and $6,700 in nursing supplies were used.

REQuIRED: Prepare journal entries to account for these transactions. Include net asset classifications, where applicable.