Problem VI (optional): The December 31, 2017 statement of financial position of Mosholu Medical Center, a major urban not-for-profit hospital and research center, is presented below. All amounts are in thousands.

Mosholu Medical Center

Statement of Financial Position as of December 31, 2017

Assets

Liabilities

Current assets

Current liabilities

Cash

2,704

Accounts payable

55,960

Receivables for patient care (net)

64,710

Accrued wages and salaries

56,942

Other receivables

24,402

Total current liabilities

112,902

Marketable securities

187,909

Noncurrent liabilities

Other current assets

27,853

Long-term debt

292,370

Total current assets

307,578

Deferred revenue & other noncurrent liabilities

106,932

Noncurrent assets

Total noncurrent liabilities

399,302

Property, plant, equipment ($512,184 less

Total liabilities

512,204

accumulated depreciation $223,259)

288,925

Net assets

Other assets

11,522

Unrestricted

15,722

Total noncurrent assets

300,447

Temporarily Restricted

62,963

Total assets

608,025

Permanently Restricted

17,136

Total net assets

95,821

Total liabilities & net assets

608,025

The following transactions and events occurred in 2018 (all dollar amounts in thousands):

1. The hospital provided $705,943 in patient care at standard rates. On average, it expects to collect approximately 75 percent ($529,457) of this amount, owing mainly to discounts allowed third-party payers. Further, it expects that 5 percent of the 75 percent ($26,473) will have to be written off as bad debts.

2. It collected $480,125 in patient accounts and it wrote off $50,000 of bad debts.

3. It also provided $52,000 in charity care which it never expected to collect.

4. It earned $15,040 in investment income, of which $10,080 is unrestricted and $4,960 is temporarily restricted.

5. It purchased plant and equipment of $2,242, all of which was paid for with restricted resources.

6. It charged depreciation of $29,262.

7. It received unrestricted pledges of $2,070 and temporarily restricted pledges of $120.It collected all of the unrestricted pledges and $100 of the temporarily restricted pledges.

8. It earned other operating revenues (including those from auxiliary enterprises) of $135,000.

9. It incurred $430,650 in wages and salaries, of which it paid $425,000. The balance was accrued. It also incurred $200,000 in other operating expenses (including those of auxiliary enterprises), of which it paid $198,500. The balance was vouchered (and thereby credited to accounts payable).

10. It incurred and paid $210,200 in costs related to restricted contracts and grants (amounts that were not included in any other expense category).It was reimbursed for $206,800 and expects to be reimbursed for the balance in the future. In addition, it received $3,000 in advances on other grants.

11. The other operating expenses include insurance costs. However, under "retrospective" insurance policies, the hospital anticipates having to pay an additional $3,500 in premiums.

Instructions

a. Prepare journal entries to record the transaction. Be sure to indicate whether each entry would affect unrestricted, temporarily restricted, or permanent restricted net assets.

b. Prepare. a statement of activities for 2018 and a statement of financial position as of December 31, 2018.