Hope Clinic is a not-for-profit outpatient facility that provides medical services to both fee - paying patients and low- income government - supported patients. Reimbursement from the government is based on total actual costs of services provided, including both direct costs of patient services and indirect operating costs. Patient services are provided through two producing departments, Medical Services and Ancillary Services (includes X-ray, therapy, etc.). In addition to the direct costs of these departments, the clinic incurs indirect costs in two service departments, Administration and Facilities. Administration costs are allocated first based on the number of full-time employees, and Facilities costs are then allocated based on space occupied. Costs and related data for the current month are as follows: Medical Ancillary Administration Facilities Services Services Direct costs $130,000 $61,500 1,491,400 $700,000 Number of employees 6484 Amount of space occupied 2,000 600 7,500 2,500 Number of patient visits -- 7,975 3,000 Required a. Using the step method prepare a schedule allocating the common service department costs to the producing departments

Hope Clinic is a not-for-profit outpatient facility that provides medical services to both fee - paying patients and low- income government - supported patients. Reimbursement from the government is based on total actual costs of services provided, including both direct costs of patient services and indirect operating costs. Patient services are provided through two producing departments, Medical Services and Ancillary Services (includes X-ray, therapy, etc.). In addition to the direct costs of these departments, the clinic incurs indirect costs in two service departments, Administration and Facilities. Administration costs are allocated first based on the number of full-time employees, and Facilities costs are then allocated based on space occupied. Costs and related data for the current month are as follows: Medical Ancillary Administration Facilities Services Services Direct costs $130,000 $61,500 1,491,400 $700,000 Number of employees 6484 Amount of space occupied 2,000 600 7,500 2,500 Number of patient visits -- 7,975 3,000 Required a. Using the step method prepare a schedule allocating the common service department costs to the producing departments

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2a
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S1. Account
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O. Account
3. St. Joseph’s Hospital began operations in December 2023 with patient service revenues totaling $980,000 (based on customary rates) for the month. Of this, $207,000 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. Joseph’s estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital’s fiscal year ends on December 31. Required: Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. Prepare the journal entries for 2024 assuming the following: $102,000 is collected from the patients during the year, and $9,800 of price adjustments are granted to individuals. Actual contractual adjustments total $157,000. The remaining receivable from third-party payors is collected. Note: For all…