Journal entries and net asset classifications

Following is a trial balance for Porschen Memorial, a nonprofit hospital:

PORSCHEN MEMORIAL HOSPITAL

Trial Balance$$Beginning of Fiscal Year

Cash $$12,000$

Patient accounts receivable $40,000$

Allowance for uncollectible accounts $$4,000$

Land $600,000$

Buildings $2,500,000$

Accumulated depreciation$$buildings $650,000$

Equipment $2,000,000$

Accumulated depreciation$$equipment $400,000$

Accounts payable $15,000$

Notes payable $100,000$

Bonds payable $2,000,000$

Net assets without donor restrictions $01,983,000$

$$5,152,000$ $$5,152,000$

During the fiscal year, the following selected transactions took place.

$1.$ Porschen had capitation agreements with several HMOs, wherein the HMOs agreed to pay monthly

premiums per member at the beginning of every month in exchange for Porschen$$s agreement

to provide hospital services to the HMO members. Porschen received premiums of $$2,000,000$

in cash during the year. In addition, Porschen billed its self$-$pay patients a total of $$100,000.$

$2.$ Several self$-$pay patient accounts that were classified as uncollectible were written off. These

accounts totaled $$2,000.$

$3.$ The MP$2$ Corporation gave the hospital a grant for research into the use of a voice$-$activated

microscope. The grant was for $$500,000.$ The entire amount was immediately invested in

marketable securities$.$

$4.$ The following operating expenses were all incurred on credit.

Nursing and other professional services $$850,000$

General expenses $$300,000$

Administrative expenses $$175,000$

Dietary services $$100,000$

$5.$ Self$-$pay patient receivables of $$110,000$ were collected.

$6.$ Accounts payable of $$1,400,000$ were paid.

$7.$ Several individuals in the community contributed a total of $$1,000,000$ for the expansion of the burn

unit of the hospital. This money was invested in marketable securities until the plans for the unit

were completed.

$8.$ Debt service of $$210,000$ on the outstanding debt was paid in cash. Of this amount, $$110,000$

was for interest, and the rest was for debt principal.

$9.$ The Hospital$$s Board of Directors decided to set aside $$25,000$ in cash from general hospital

resources for the development of its professional nursing staff.

$10.$ The construction and planning costs incurred on the new burn unit totaled $$200,000.$

This amount was paid from resources contributed for that purpose. To make these payments,

investments that originally cost $$190,000$ were sold for $$205,000.$ In addition, $$10,000$ in cash

income was received on the investments. Assume that $($a$)$ the income from the investments has the

same restrictions as the original donation and $($b$)$ the hospital$$s accounting policy calls for realized

and unrealized gains and losses on restricted net assets to be recorded in a single account.

$11.$ During the year, the hospital received $$25,000$ in cash income from the investment of the MP$2$

grant money. Assume that the investment income is restricted in the same way as the original grant.

$12.$ Research costs associated with the MP$2$ grant were $$20,000.$ These costs were paid with cash

generated by the investment of the original grant.

$13.$ Larry Porschen III gave the hospital $$15,000,$ which must be maintained intact. The income from the

gift can be used in any way the managing board feels is helpful to the hospital. The money was

immediately invested in marketable securities$.$

$14.$ Investments in the Larry Porschen III Fund earned $$2,000$ during the year. Of this amount,

$$1,900$ was received in cash.

$15.$ The fair value of the remaining investments restricted for the burn unit at the end of the year

was $$850,000$

Prepare journal entries for the above transactions.

If no entry is necessary, select $\text{'}$No debit $($or credit$)$ entry needed' in the account fields

and enter $0$ in the amount fields.