ACCOUNTING FOR GOVERNMENTAL AND NONPROFIT ORGANIZATIONS

Ranchester General Hospital, a nongovernmental and not for profit hospital, began operations on January 1, 20X4. The hospital used a bond issue to acquire the assets of an existing hospital. The attached transactions occurred during the year. REQUIRED: (1) (2) (3) Using the attached information, prepare a Statement of Operations, in proper form, for the year ending December 31, 20X4. Using the above information, prepare a Statement of Changes in Net Assets, in proper form, for the year ending December 3,20X4. Using the above information, prepare a Balance Sheet, in proper form, at December 31, 20X4. RANCHESTER GENERAL HOSPITAL SUMMARY TRANSACTIONS FOR OPERATIONS FOR YEAR ENDING DECEMBER 31, 20X4 (a) Tosupply cash to begin operations, long term revenue bonds were issued. The proceeds were $4 million. The bonds were issued for their face value. (b) To provide security for payment of debt service on the bonds, the hospital was required by the bond agreement to deposit $200,000 of the proceeds in an escrow account with a trustee, to remain there until the debt is completely paid off. The trustee immediately invested the cash in a certificate of deposit. (c The physical assets of the existing hospital were purchased for S3,500,000 cash. The appraised values of the land, building, and equipment were $400,000, $2,600,000, and S500,000, respectivel (d) Services to Medicare program recipients were billed at predetermined rates. Medicare program recipients received services amounting to $4 million at the hospital's established billing rates. Contractual adjustments against the predetermined billing rates were S600,000. By year end, the hospital had collected $3,100,000 against these billings e) Th e hospital has an agreement to provide services to members of an HMO at rates per member, per month. In accordance with this arrangement, the hospital received monthly cash premiums amounting to $1.4 million (f) The hospital provided care to charity patients amounting to $300,000 at established billing rates The hospital provided care to self pay patients amounting to $700,000 at established billing rates. The hospital collected $550,000 in cash against these billings. It also established an allowance for uncollected receivables of 5 percent of the amount billed, and subsequently wrote off $12,000 as uncollectible (g) (h) The hospital purchased medicines and other supplies for $80,000 cash. The medicines and supplies were placed in inventory (i) Inventories were used as follows: nursing care, $60,000; and dietary services, $10,000 Operating expenses ofthe hospital, all ofwhich were paid in cash, were S4,750,000. The expenses should be broken down as follows: nursing care, S3,200,000; dietary services, $500,000; maintenance services, S450,000; and administrative services, S600,000 (k) The hospital paid debt service on the bonds in the amount of S440,000 for the year. Of this amount, interest was $240,000 and bond principal was $200,000 (1) In accordance with the bond agreement, the trustee forwarded the interest on the certificate of deposit to the hospital for use in the hospital's general operations. The interest amounted to $10,000. (m) Nursing care salaries were accrued at year end in the amount of $40,000. (n) Depreciation was recorded as follows: building, S130,000; and equipment, S50,000 (o) A journal entry was made to report $100,000 of the outstanding long term debt as current