Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

St. Josephs Hospital began operations in December 2019 and had patient service revenues totaling $1,330,000 (based on customary rates) for the month. Of this, $143,000

St. Josephs Hospital began operations in December 2019 and had patient service revenues totaling $1,330,000 (based on customary rates) for the month. Of this, $143,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third-party payors, including insurance companies and government health care agencies. St. Josephs estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospitals fiscal year ends on December 31. Required: 1. Prepare the journal entries for December 2019. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2020 assuming the following: $123,000 is collected from the patients during the year and $11,800 of price adjustments are granted to individuals. Actual contractual adjustments total $356,000. The remaining receivable from third-party payors is collected.

1 Record the patient service revenues for 2019; the insurance deductibles and copayments; and the balance billing to third-party payors.

2 Record the 20 percent third-party payor charges deductible by contractual adjustment for 2019.

3 Record the provision for uncollectible accounts for 2019.

4 Record the amount collected from the patients during the year 2020 and also the price adjustments granted to individuals.

5 Record the year end allowance for contractual adjustments for 2020.

6 Record the amount collected and actual contractual adjustments receivable from the third-party payors for 2020.

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

Frank Woods Business Accounting Volume 1

Authors: Alan Sangster Lewis Gordon Frank Wood

14th Edition

1292208627, 9781292208626

More Books

Students also viewed these Accounting questions

Question

Select a job that you would like to use as part of this assignment.

Answered: 1 week ago