02 Jul Two Assignment Questions ( Must complete all parts of each question)
*Please do not copy the answers from the internet, the amounts have been changed for each question*
Revenue and Related Transactions. During its current fiscal year, Evanston General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year).
Services provided to inpatients and outpatients amounted to $9,520,000, of which $550,000 was for charity care, $970,000 was paid by uninsured patients, and $8,000,000 was billed to Medicare, Medicaid, and insurance companies.
Donated pharmaceutical and medical supplies valued at $340,000 were received and utilized as general expenses.
Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $6,000,000 of the $8,000,000 billed by the hospital during the year (see transaction 1).
An unconditional contribution of $6,000,000 was received in cash from a donor to construct a new facility for care of Alzheimers patients. The full amount is expendable for that purpose. No activity occurred on this project during the current year.
A total of $965,000 was received from the following activities/sources: cafeteria and gift shop sales, $710,000; medical seminars, $125,000; unrestricted transfers from the Evanston General Hospital Foundation, $75,000; and fees for medical transcripts, $55,000.
Uncollectible accounts totaling $4,250 were written off. The allowance for uncollectible receivables was increased by $1,000.
Governmental Hospital. During 2017, the following selected events and transactions were recorded by Nichols County Hospital.
Gross charges for hospital services, all charged to accounts and notes receivable, were as follows:
Patient service revenues
The hospital cafeteria and gift shop had cash sales of $295,300.
Additional information relating to current-year is as follows:
Provision for bad debts
A federal cost reimbursement research grant of $350,000 was awarded. As of the end of the year, $200,000 in expenses related to the grant had been made. (Hint: See Chapter 4 for eligibility requirements.)
Vouchers totaling $1,326,540 were issued for the following items:
Fiscal and administrative services expenses
General services expenses
Nursing services expenses
Other professional services expenses
Expenses accrued at December 31, 2017
Collections of accounts receivable totaled $1,159,000. Accounts written off as uncollectible amounted to $11,900.
Cash payments on vouchers payable (paid to employers and suppliers) during the year were $1,031,200.
During the year, the hospital received unrestricted cash contributions of $50,000 and unrestricted cash income from endowment investments of $6,500.
Supplies of $99,770 were issued to nursing services.
On December 31, 2017, accrued interest income on investments was $800.
Depreciation of buildings and equipment was as follows:
On December 31, 2017, closing entries were made in the general journal.
Using this information,
Show in general journal form the entries that should be made for each of the transactions and the closing entries in accordance with the standards for a governmental health care entity that follows proprietary fund accounting, as discussed in this chapter and Chapter 7.
Using the available information, calculate the net patient service revenue that would be reported on the statement of revenues, expenses, and changes in net position.
Using this information:
Record the preceding transactions in general journal form.
Prepare the unrestricted revenues, gains, and other support section of Evanston Dearborn General Hospital’s statement of operations for the current year, following the format in Illustration 164.
On which statement would restricted contributions be reported? Explain.
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