(b) University of Kashmir had the following transactions at the beginning of its academic

year:

1.Student tuition and fees were billed in the amount of $3,240,000. Of that amount $2,200,000 was collected in cash.

2.General Grants in the amount of $900,000 were received by the university.

3.The Grants were applied to student accounts.

4.Student scholarships, for which no services were required, amounted to $180,000. These were applied to student tuition bills at the beginning of each semester.

Required:

Prepare journal entries to record the above transactions assuming:

a. University of Kashmir is a public university.

b. University of Kashmir is a private university.

(10 marks)

(c) Sharjah City Hospital began operations in December 2019 and had patient service revenues totaling$5,000,000(based on customary rates) for the month. Of this, $3,000,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third party payors, including insurance companies and government health care agencies. Sharjah City Hospital estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital's fiscal year ends on December 31.

Required:

1.Prepare the journal entries for December 2019. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments.

2.Prepare the journal entries for 2020 assuming the following:

a.$247,500 is collected from the patients during the year and $24,500 of price adjustments are granted to individuals.

b.Actual contractual adjustments total $465,000. The remaining receivable from third-party payors is collected.

3.The actual contractual adjustments differed from the amount initially estimated by the hospital. Briefly describe the type of accounting change this represents and the appropriate accounting treatment.

(10 marks)

(d)Describe the accounting treatment by hospitals and health care organizations for each of the following:

a. Charity care

b. Implicit price concessions

c. Contractual adjustments

(5 marks)