On January $1,2025,$ a new Board of Directors was elected for Pharoah Hospital. The new board switched to a different accountant. The land account balance is composed of

A $1912$ appraisal of land at $$10,000$ and building at $$5,000,$ received by

donation at that time. The building was demolished in $1934$

$$15,000$

Appraisal increase based on insured value in land title policies

The building balance is composed of

The estimated useful lives of the hospital building and the elevator when new were $50$ years $(9$ years remaining$)$ and $20$ years $(5$ years

remaining$),$ respectively.

The hospital's equipment was inventoried on January $1,2025.$ The costs shown in the inventory agreed with the equipment

account balance in the general ledger. The allowance for depreciation account at January $1,2025,$ included $$151,000$

applicable to equipment, and that amount was determined to be accurate. All depreciation is computed on a straight$-$line

basis.

A bank loan was obtained to finance the cost of new operating room equipment purchased in $2021.$ Interest was paid to

December $31,2024.$

Common stock with a market value of $$389,000$ was donated to Pharoah Hospital with the stipulation that the proceeds from

the sale of the stock must be used for facilities expansion. The hospital plans to undertake expansion of its facilities next year

and to sell these securities at that time. Trial Balance

Account Description

l

Totals

Totals AdjustmentsEndowment Fund

Plant Replacement Fund

$

$

$

After reviewing the hospital's books, the accountant decided that the accounts should be adjusted. Effective January $1,2025,$ the

board decided that

Separate funds should be established for the General Fund, the Pharoah Endowment Fund, and the Plant Replacement and

Expansion Fund $($the old balances will be reversed to eliminate them$).$

The accounts should be maintained in accordance with fund accounting principles. The balances in the general ledger at

January $1,2025,$ are presented here:

The following additional information is available:

Under the terms of the will of $J.$ Ethington, founder of the hospital, "The principal of the bequest is to be fully invested in trust

forevermore in mortgages secured by productive real estate in Central City and$/$or in U$.$S$.$ Government securities $...$ and the

income therefrom is to be used to defray current expenses."

The Endowment Fund consists of the following:

Cash received in $1912$ by bequest from Ethington

$$87,000$

Net gains realized from $1956$ through $1989$ from the sale of real estate

acquired $in$ mortgage foreclosures $25,000$

Income received from $1990$ through $2024$ from $90-$day U$.$S$.$

treasury bill investments