Question
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
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 | 56942 |
Other receivables | 24,402 | Total current liabilities | 112902 |
Marketable securities | 187909 | Noncurrent liabilities | |
Other current assets | 27853 | Long-term debt | 292370 |
Total current assets | 307578 | Deferred revenue & other noncurrent liabilities | 106932 |
Non current assets | Total non current liabilities | 399302 | |
PPE ($512184 less acc. depreciation $223259) | 288925 | Net assets | 512204 |
Other assets | 11522 | Unrestricted | 15722 |
Total noncurrent assets | 300447 | Temporarily Restricted | 62963 |
Total assets | 608025 | Permanently Restricted | 17136 |
Total Net Assets | 95821 | ||
Total liabilities & net assets | 608025 |
The following Transactions and events occurred in 2018 (all dollar amounts in thousand):
1. The hospital provided $705943 in patient care at standard rates. on average, it expects to collect approximately 75% ($529457) of this amount, owing mainly to discounts allowed third-party payers. Further, it expects that 5% of the 75% ($26473) will have to be written off as bad debts.
2. It collected $480125 in patient accounts and it wrote off $50000 of bad debt.
3. It also provided $52000 in charity care which it never expected to collect.
4.it earned $15040 in investment income, of which $10080 is unrestricted and $4960 is temporarily restricted.
5. It purchased plant and equipment of $2242, all of which was paid for with restricted reasorces.
6.it charged depreciation of $29262.
7. It received unrestricted pledges of $2070 and temporarily restricted pledges of $120. it collected all of the unrestricted pledges and $100 of the temp restricted pledges.
8. It earned other operating revenues (Including those from auxiliary enterprises) of $135000.
9. It incurred $430650 in wages and salaries, of which it paid $425000. The balance was accrued. It also incurred $200000 in other operating expenses (including those of auxiliary enterprises), of which it paid $198500. The balance was vouchered (and thereby credited to accounts payable).
10. it incurred and paid $210200 in costs related to restricted contracts and grants (amounts that were not included in any other expense category). It was reimbursed for $206800 and expects to be reimbursed for the balance in the future. In addition, it received $3000 in advances on other grants.
11. The other operating expenses include insurance cost. However, under "retrospective" insurance policies, the hospital anticipates having to pay an additional $3500 in premiums.
Required
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.
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