That is the question, the below is the figure to which it refers.
18.1. Given here is the preadjusted trial balance of Greatville Hospital at December 31, 20x1, the end of the hospital's current fiscal year: Dr. Cr. $ 31,600 15,000 -0- 102,400 Acct. No. 101 102 103 104 105 106 107 108 109 120 130 $ -- Cash Temporary investments Accrued interest receivable Accounts receivable Allowance for uncollectible accounts Inventory Prepaid insurance Prepaid rent Prepaid interest Land Buildings 11,600 1,980 2,100 1,200 22,000 175,000 131 Accumulated depreciation-buildings 140 Equipment 80,000 141 Accumulated depreciation equipment 201 Accounts payable 31,300 202 Notes payable 20,000 203 Accrued interest payable -0- 204 Accrued salaries and wages payable -0- 205 Deferred rental income 1,680 206 Deferred tuition income 1,215 250 Bonds payable 100,000 301 Hospital net assets 207,085 302 Revenue and expense summary -0- 401 Routine services revenue 169,300 402 Ancillary services revenue 128,700 403 Interest income 404 Rental income 405 Tuition income 406 Other operating revenues 29,800 501 Contractual adjustments 20,300 502 Charity care adjustments 28,200 601 Salaries and wages expense 141,200 602 Supplies expense 27,300 603 Utilities expense 15,100 604 Insurance expense 605 Repairs expense 7,600 606 Rent expense 607 Depreciation expense 608 Interest expense 609 Bad debt expense Other expenses 6,500 Totals $689,080 $689,080 The following additional information is available: 1. The temporary investment consists of $15,000 (face value) of 8 percent bonds acquired by the hospital on October 1, 20X1. These bonds pay interest annually on October 1, commencing October 1, 20X2. Of the December 31, 20X1, accounts receivable, it is estimated that 12 percent will eventually prove uncollectible by reason of (1) contractual adjustments, 5 percent; (2) charity care, 4 percent; and (3) bad debts, 3 percent. 3. A three-year insurance premium of $1,980 was paid in advance by the hospital on January 1, 20X1. 6. 4. The hospital prepaid a year's rent of $2,100 on June 1, 20X1. 5. On November 1, 20x1, the hospital borrowed $20,000 from a bank by issuing a six-month, 12 percent note. Interest on the note was prepaid. The hospital building, which was acquired on January 1, 20x1, has an estimated useful life of 40 years and a salvage value of $15,000. 7. The equipment, which was acquired on January 1, 20x1, has an estimated useful life of eight years and a 10 percent salvage value. 8. On April 1, 20x1, the hospital issued $100,000 of 15-year, 6 percent bonds at face value. These bonds pay interest annually on April 1, commencing April 1, 20X2. 9. Unpaid salaries and wages at December 31, 20x1, totaled $15,600. 10. The hospital received one year's rent of $1,680 in advance on March 1, 20X1. 11. On September 1, 20X1, the hospital received nine months' tuition in advance in connection with one of its educational programs. Required: (1) Prepare a worksheet to develop financial statements in the manner illustrated in Figure 8.3. (2) Prepare, in good form, a complete set of financial statements for 20x1. FIGURE 8.3 Hoosier Hospital Worksheet to Develop Financial Statements, Year Ended December 31, 20X1 Preadjusted Trial Balance 12/31/X1 Dr. Cr. 38,300 12,000 12/31/x1 Adjustments Dr. Cr. 20X1 Statement of Ops. Dr. Cr. 20x1 Stater of Net As Dr. Acct. No. Account Titles 101 Cash 102 Temporary investments 103 Accrued interest receivable 104 Accounts receivable s receivable 105 Allowance for uncollectible accounts Adjusted Trial Balance Dr. Cr. 38,300 12,000 240 96,600 16,890 (8) 240 96,600 (11) 4,830 (12) 2,400 (13) 9,660 10,500 3,600 1,080 720 25,000 (1) 1,200 (2) 720 (3) 240 10,500 2,400 360 480 25,000 180,000 180,000 10) 2,880 2,880 60,000 60,000 (10) 5,400 106 Inventory 107 Prepaid insurance 108 Prepaid rent 109 Prepaid interest 120 Land 130 Buildings 131 Accumulated depreciation- buildings 140 Equipment 141 Accumulated depreciation- Equipment 201 Accounts payable 202 Notes payable 203 Accrued interest payable 204 Accrued salaries and wages payable 205 Deferred rental income 206 Deferred tuition income 250 Bonds payable 301 Hospital net assets 302 Revenue and expense summary 29,840 18,000 5,400 29,840 18,000 3,600 (4) 3,600 (5) 13,000 4,200 6) 1,750 2,160 (7) 960 80,000 13,000 2,450 1,200 80,000 225,000 225,000 FIGURE 8.3 (CONTINUED) Hoosier Hospital Worksheet to Develop Financial Statements, Year Ended Decem Preadjusted Trial Balance 12/31/1 Dr. Cr. 151,300 137,400 12/31/x1 Adjustments Dr. Cr. 20x: Equity Star Dr. (8) 240 (6) 1,750 (7) 960 Adjusted Trial Balance Dr. 151,300 137,400 240 1,750 960 27,100 31,600 24,230 152,600 28,600 Acct. No. Account Titles 401 Routine services revenue 402 Ancillary services revenue 403 Interest income 404 Rental income 405 Tuition income 406 Other operating revenues 501 Contractual adjustments 502 Charity care adjustments 601 Salaries and wages expense 602 Supplies expense 603 Utilities expense 604 Insurance expense 605 Repairs expense 606 Rent expense 607 Depreciation expense 27,100 29,200 19,400 139,600 28,600 (11) 2,400 (12) 4,830 (5) 13,000 20X1 Income Statement Dr. Cr. 151,300 137,400 240 1,750 960 27,100 31,600 24,230 152,600 28,600 14,400 1,200 8,300 720 8,280 14,400 (1) 1,200 8,300 14,400 1,200 8,300 720 8,280 (2) 720 (9) 2,880 (10) 5,400 (3) 240 (4) 3,600 (13) 9,660 608 Interest expense 3,840 3,840 7,700 675,000 9,660 7,700 717,010 675,000 46,880 46,880 717,010 | 609 Bad debt expense 610 Other expenses Totals Net income for the year Totals Hospital net assets, December 31, 20x1 Totals 9,660 7.700 291,130 318,750 27,620 318,750 318,750 -O 2 252,620 252,620
