Question
Augusta Regional Medical Center (ARMC) is a private not-for-profit hospital offering health care to patients, including some with no ability to pay for the services
Augusta Regional Medical Center (ARMC) is a private not-for-profit hospital offering health care to patients, including some with no ability to pay for the services received. As part of its mission, the ARMC also operates several educational programs. At the start of 2020, ARMC holds net assets of $9 million. Of that amount, $1 million is without donor restrictions, $600,000 has a donor time restriction, $3.4 million has a donor purpose restriction, and $4 million is held permanently based on various donor stipulations.
Medical care and health education are the only program services according to ARMC officials. Supporting services are (1) fundraising and (2) administrative costs.
Prepare journal entries for each of the following:
- Local merchants donate linens and other supplies with a fair value of $200,000. Of this amount, $40,000 is used in operations before the end of the year.
- In past years, ARMC has paid a local gardening company $36,000 each year to maintain flower beds around the hospital to improve the facilitys appearance. In 2020, volunteers did this work free of charge.
- Cash for $50,000 is given to the hospital for a new X-ray machine. The money must be returned if the machine is not acquired within three years.
- A new X-ray machine is acquired for $90,000 in cash. Donors made no specifications about the reporting of this asset.
- Doctors salaries of $800,000 are paid. Administrators salaries of $400,000 are paid.
- ARMC receives notification from the Z-Trrek Foundation that it had received a cash donation of $100,000 from Mr. and Mrs. Edwardo Nelson. The money is to be given to a local health care entity with an outstanding reputation. Z-Trrek has decided to award the money to ARMC and is waiting for final approval from the Nelsons before mailing a check for that amount. The final approval is simply a courtesy to the donors and does not constitute variance powers.
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