1. Services provided to patients amounted to $3,300,000 at established billing rates. Following is an analysis of the biling a. Medicare patients were billed for $2,000,000 at established rates. However, contractual allowances against these billings were $400,000 b. Bilings under a retrospective arrangement with a third party were $600,000 at the established rates. However, the interim billing rates called for contractual adjustments of $100,000 Billings to self.pay patients were $500,000 at established rates. Based on experience, the hospital anticipated that $25.000 of the billings would not be collected Services to charity patients were $200,000 at established rates 2. lewentories of $56,000 were purchased on credit 3. Operating expenses were incurred as follows Health Care Services $3,400,000 General expenses 5200,000 Administrative expenses 590.000 Assume that all the expenses were incurred on credit 4. The board decided to set aside 530,000 in cash in a separate account to provide for the continuing education of nurses 5. The hospital entered into a capitation agreement with the county in which it was located agreeing to provide hospital services to certain groups of county employees and their dependents. The agreement provided for the county to make a monthly payment for each covered county employee Cash payments received by the hospital under this agreement were $300,000 6. Collections of patient recevables totaled 52,200,000. In addition 513.000 of patient receivables were written off as uncollectible 7. Payments of accounts payable totaled $1,900,000. 8. The use of Inventaries was recorded as follows Healthcare services S000 Generate de 50.000 Depreciation was recorded as follow building H0,000 quint350.000 10. During the year, the hospital paid debt service of $26.000 on the outstanding bonds conting of interest of $120.000 and $100.000. At year end, the hospital made an entry to report 100,000 of its outstanding om det surrent is the delit was used to finance the purchase of the hospital capital asset) 11. During the year, a self-pay patient instituted legal action in the amount of $200,000 against the hospital for medical malpractice. The hospital does not carry insurance Hospital attorneys have started negotiations with the claimant and believe it is highly probable that the claim can be settled for $50,000. (Charge the expense to Health care services) 12. At year end, the hospital reviewed its cost accounting records in connection with the retrospective billing arrangement made with the third party payer in transaction 1.b The hospital believes it will need to refund $40,000 to that third party in accordance with that agreement (the third party had paid all the billings made by the hospital in Use the preceding information to do the following: a. Prepare all the journal entries necessary to record these transactions. Ref. Description Debit Credit 1 ( 1 a . 1 b . 10 . To reclassify cash designated for continuting education. To reclassify funds set aside for continuing education 5 4 . 6 Cash