FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Journal entries
Prepare journal entries to record the following transactions of a nonprofit hospital, with expense
transactions
categorized by function:
1. The hospital billed its uninsured patients for $250,000. Based on historical experience, it expects to
collect 45 percent of that amount over time.
2. Nurses and doctors employed by the hospital were paid their salaries, $100,000.
3. The chief administrative officer was paid her salary of $10,000.
4. The hospital paid its utility bill, $5,000.
5. Depreciation on the equipment was $34,000.
6. Several adults donated their time (worth $5,000) selling merchandise in the hospital gift shop.
7. The hospital billed Medicare $100,000 for services provided at its established rates. The prospective
billing arrangement gives Medicare a 40 percent discount from these rates.
8. A contribution without donor restrictions of $4,000 was received.
If no adjustment is necessary, select 'No debit (or credit) entry needed' in the account fields and
enter 0 in the amount fields.
Chapter 14 - Accounting for Health Care Organizations
9
250,000
+
Patient accounts receivable
Patient service revenues
To record billings to uninsured patients.
Provision for implicit concessions
Patient accounts receivable
To record estimate of uncollectible amounts.
Salaries payable
Cash
To record salaries of nurses and doctors.
Salaries payable
Cash
To record CEO salary.
Administrative services expense
Cash
To record payment for utility bill.
Accumulated depreciation
To record depreciation.
Patient accounts receivable
Patient service revenues
To record volunteer time.
Provision for contractual adjustments
Patient accounts receivable
To record billings to Medicare.
Cash
Contribution revenue (or gains)
To record estimated Medicare discount.
#
#
#
+
#
#
+
✪
+
+
+
+
+
+
+
#
0
137,500
0
100,000
10,000
0
5,000
0
34,000
0
100,000
0
60,000
0
4,000
0
03
250,000
0
137,500✔
0x
100,000✔
0x
10,000 ✓
0x
5,000 ✓
0x
34,000 x
0x
100,000 x
0x
60,000 x
0x
4,000 X
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Transcribed Image Text:Journal entries Prepare journal entries to record the following transactions of a nonprofit hospital, with expense transactions categorized by function: 1. The hospital billed its uninsured patients for $250,000. Based on historical experience, it expects to collect 45 percent of that amount over time. 2. Nurses and doctors employed by the hospital were paid their salaries, $100,000. 3. The chief administrative officer was paid her salary of $10,000. 4. The hospital paid its utility bill, $5,000. 5. Depreciation on the equipment was $34,000. 6. Several adults donated their time (worth $5,000) selling merchandise in the hospital gift shop. 7. The hospital billed Medicare $100,000 for services provided at its established rates. The prospective billing arrangement gives Medicare a 40 percent discount from these rates. 8. A contribution without donor restrictions of $4,000 was received. If no adjustment is necessary, select 'No debit (or credit) entry needed' in the account fields and enter 0 in the amount fields. Chapter 14 - Accounting for Health Care Organizations 9 250,000 + Patient accounts receivable Patient service revenues To record billings to uninsured patients. Provision for implicit concessions Patient accounts receivable To record estimate of uncollectible amounts. Salaries payable Cash To record salaries of nurses and doctors. Salaries payable Cash To record CEO salary. Administrative services expense Cash To record payment for utility bill. Accumulated depreciation To record depreciation. Patient accounts receivable Patient service revenues To record volunteer time. Provision for contractual adjustments Patient accounts receivable To record billings to Medicare. Cash Contribution revenue (or gains) To record estimated Medicare discount. # # # + # # + ✪ + + + + + + + # 0 137,500 0 100,000 10,000 0 5,000 0 34,000 0 100,000 0 60,000 0 4,000 0 03 250,000 0 137,500✔ 0x 100,000✔ 0x 10,000 ✓ 0x 5,000 ✓ 0x 34,000 x 0x 100,000 x 0x 60,000 x 0x 4,000 X
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