Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Goodfellow & Perkins LLP is a successful mid-tier accounting firm with a large range of clients across Texas. During 2022, Goodfellow & Perkins gained a

Goodfellow & Perkins LLP is a successful mid-tier accounting firm with a large range of clients across Texas. During 2022, Goodfellow & Perkins gained a new client, Brookwood Pines Hospital (BPH), a private, not-for-profit hospital. The fiscal year-end for BPH is June 30. Goodfellow & Perkins is performing the audit for the fiscal year-end June 30, 2023. BPH provides medically necessary care to patients, regardless of their ability to pay. Both uninsured and underinsured patients are offered discounts of up to 100% of charges based on their income as a percentage of the federal poverty-level guidelines. BPH does not pursue collection of these accounts; therefore, they are not reported in patient service revenue and accounts receivable. The cost of providing the charity care is included in operating expenses. BPHs investments consist of mutual funds, common equities, corporate and U.S. government debt issues, state and municipal government debt issues, and trusts. A majority of the investments are the result of charitable contributions to the hospital by generous donors. Earnings from the investments are used to cover the costs of the charity care. BPH is also eligible for certain government grants to help cover the costs of the charity care. Selected financial statements and other financial information are provided below. Since BPH operates as a non-for-profit, it reports assets, liabilities, and net assets. (Note: Net assets takes the place of equity since there are no owners.)

image text in transcribed

The breakdown by payor of BPH's accounts receivable balance approximates the following: Medicare 16% Medicaid 12% Blue Cross 19% Other insurance providers 33% Patients 20% The historical estimated allowance for uncollectible accounts is approximately 23%. The following table lists selected asset accounts for BPH as of June 30, 2023 and 2022 (amounts in thousands). June 30, 2023 $ 43,077 22,725 June 30, 2022 $ 36,361 49,338 99,962 10,056 119,380 10,740 Account Cash and cash equivalents Short-term investments Patient accounts receivable, net Inventory Long-term investments Property and equipment: Land Buildings Equipment and furniture Construction in progress 915,088 807,321 57,839 577,546 194,481 89,890 919,756 343,324 576,432 58,140 556,590 169,603 58,290 842,623 303,642 538,981 Accumulated depreciation Property and equipment, net Total current assets Total assets 233,286 1,787,720 225,962 1,618,698 Assertions and audit procedures Analysis: Select three asset ac- counts that you consider significant accounts for BPH and explain why they are significant. For each significant account that you identify, determine the two most relevant assertions for that account and select one audit procedure that would provide sufficient appropriate audit evidence related to each of the relevant assertions

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

The Digital Transformation Of Auditing And The Evolution Of The Internal Audit

Authors: Nabyla Daidj

1st Edition

1032103914, 978-1032103914

More Books

Students also viewed these Accounting questions

Question

explain the need for human resource strategies in organisations

Answered: 1 week ago

Question

describe the stages involved in human resource planning

Answered: 1 week ago