Financial Management of Health Care Organizatios, 4th Edition Zelman, McCue, Glick, Thomas:

Chapter 3-11:

Transactions Plus Multiple Statements:

List and record each transaction for the Claymont Outpatient Clinic, under the accrual basis of accounting, at December 31, 20X1. Then Develop a balance sheet as of December 31, 20X1, and a statement of operations for the year ended December 31, 20X1.

a) Clinic Received a $10,000,000 unrestricted cash contribution from the community (hint: this transaction increases the unrestricted net assets account).

b) the clinic purchased $4,500,000 of equipment. The clinic paid cash for equipment.

c) the clinic borrowed $2,000,000 from the bank on a long-term basis

d) the clinc purchased $550,000 of supplies on credit

e) the clinic provided $8,400,000 of services on credit

f) In the provision of these services, the clinic used $420,000 of supplies

g) the clinic received $800,000 in advance to care for capitated patients

h) the clinic incurred $4,500,000 in labor expenses and paid cash for them

i) the clinic incurred $2,230,000 in general expensed and paid cash for them

j) the clinic received $6,000,000 from patients and their third parties in payment of outstanding accounts

k) the clinic met $440,000 of its obligation to capitated patients ( transaction g)

L) the clinic made a $400,000 cash payment on the long-term loan

m) the clinic also made a cash interest payment of $40,000

n) A donor made a temporary restricted donation of $370,000, which is set aside in temporary investments

o) the clinic recognized $400,000 in depreciation for the the year.

p) the clinic estimated that $850,000 of patient accounts would not be received, and established a provision for bad debt.