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During 2017, the following transactions were recorded by the Port Hudson Community Hospital, a private sector not-for-profit institution. Gross charges for patient services, all charged
During 2017, the following transactions were recorded by the Port Hudson Community Hospital, a private sector not-for-profit institution.
- Gross charges for patient services, all charged to Patient Accounts Receivable, amounted to $1,850,000. Contractual adjustments with third-party payers amounted to $500,000.
- Charity services, not included in transaction 1, would amount to $76,000, had billings been made at gross amounts.
- Other revenues, received in cash, were parking lot, $25,000; cafeteria, $42,500; gift shop, $7,500.
- Cash gifts for cancer research amounted to $30,250 for the year. During the year, $59,000 was expended for cancer research technicians salaries (debit Operating ExpenseSalaries and Benefits).
- Mortgage bond payments amounted to $58,000 for principal and $34,000 for interest. Assume unrestricted resources are used.
- During the year, the hospital received, in cash, unrestricted contributions of $49,000 and unrestricted income of $41,250 from endowment investments. (It is the hospitals practice to treat unrestricted gifts as nonoperating income.)
- New equipment, costing $162,000, was acquired using donor-restricted cash that was on hand at the beginning of the year. Port Hudsons policy is to record all equipment in the unrestricted net asset class.
- An old piece of lab equipment that originally cost $100,000 and that had an undepreciated cost of $20,000 was sold for $12,000 cash.
- At the end of 2017, pledges received in the amount of $145,000 were intended to be paid and used for unrestricted purposes in 2018.
- Cash contributions were received as follows: temporarily restricted for purposes other than plant, $46,250; temporarily restricted for plant acquisition, $140,000.
- Bills totaling $229,500 were received for the following items:
Utilities | $ | 145,500 |
Insurance | 84,000 | |
- Depreciation of plant and equipment amounted to $195,000.
- Cash payments on vouchers payable amounted to $181,500. Another $811,500 was expended on wages and benefits. Cash collections of patient accounts receivable amounted to $1,190,000.
- Closing entries were prepared.
Required: a. Record the transactions in the general journal of the Port Hudson Community Hospital. b. Prepare a Statement of Operations for the Port Hudson Community Hospital for the year ended December 31, 2017.
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