Problem 3

Use the information to complete the steps in the box below.

Listed below are selected transactions from the City of Glendale Hospital. All amounts are in thousands of dollars.

Transactions:

1. The hospital provided patient services during the year that had standard charges of $12,000. Contractual adjustments awarded to patients under contracts with insurance companies and under government programs totaled $3,000. Uncollectible accounts are expected to be approximately $1,000.
2. Nursing and other professional salaries paid during the year totaled $2,500.
3. Depreciation for the year was $600 for the building and $900 for equipment.
4. Medical supplies costing $2,800 were purchased during the year. The inventory of supplies increased from $200 at the beginning of the year to $300 at year end.
5. The hospital received a $4,500 gift to be used for the purchase of specialized diagnostic equipment.
6. The hospital received a $600 gift to be used for providing specialized coronary care services to patients.
7. The hospital purchased $2,000 of diagnostic equipment with the donation received for that purpose.
8. The hospital incurred $500 of operating expenses for the care of coronary patients consistent with the purposes of that donation.
9. The hospital issued $4,000 of 15-year, 8% bonds at par at mid-year to finance a new addition for the hospital.
10. The hospital estimates that malpractice claims against the hospital of $600 ultimately will result in liabilities of $200 that will have to be paidbut probably will not have to be paid during the next fiscal year.

Required Steps

Prepare the journal entries required of a government hospital for these transactions.