Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

er General Hospital, a nongovernmental and not for profit hospital, began operations on January 1, 20X4. The hospital used a bond issue to acquire the

image text in transcribed
image text in transcribed
er 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 31,20X4. 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) To supply cash to begin operations, long term revenue bonds were issued. The proceeds were S4 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 witha 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 $3,500,000 cash. The appraised values of the land, building, and equipment were $400,000, $2,600,000, and S500,000, respectively (d) Services to Medicare program recipients were billed at predetermined rates. Medicare program recipients received services amounting to S4 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 The 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 S1.4 million. () The hospital provided care to charity patients amounting to $300,000 at established billing rates The hospital provided care to selfpay patients amounting to $700,000 atestablished 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 (g) wrote off S12,000 as uncollectible. (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. G) Operating expenses of the hospital, all of which were paid in cash, were $4,750,000. The expenses should be broken down as follows: nursing care, $3,200,000; dietary services S500,000; maintenance services, $450,000; and administrative services, S600,000 (k) The hospital paid debt service on the bonds in the amount of $440,000 for the year. Of this ount, 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, $50,000. (o A journal entry was made to report S100,000 of the outstanding long term debt as current

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions

Question

Who is responsible for collecting the data?

Answered: 1 week ago

Question

Whatisthe'proviso'( 668E(1A)CriminalCode 1899 )?

Answered: 1 week ago

Question

4. Support and enliven your speech with effective research

Answered: 1 week ago