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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: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $102,000 is collected from the patients during the year, and $9,800 of price adjustments are granted to individuals. b. Actual contractual adjustments total $157,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. A No Transaction 1a Answer is not complete. General Journal Patient Accounts Receivable-Patients Revenues-Without Donor Restrictions-Patient Service Revenue B 1b Contractual Adjustments Patient Accounts Receivable-Patients C 1c Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments D 2a Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients E 201 Contractual Adjustments Allowance for Contractual Adjustments F 2b2 Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit 980,000 * Credit 980,000 154,400 154,400 31,050 31,050 102,000 9,800 111,800 618,600

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: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $102,000 is collected from the patients during the year, and $9,800 of price adjustments are granted to individuals. b. Actual contractual adjustments total $157,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. A No Transaction 1a Answer is not complete. General Journal Patient Accounts Receivable-Patients Revenues-Without Donor Restrictions-Patient Service Revenue B 1b Contractual Adjustments Patient Accounts Receivable-Patients C 1c Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments D 2a Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients E 201 Contractual Adjustments Allowance for Contractual Adjustments F 2b2 Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit 980,000 * Credit 980,000 154,400 154,400 31,050 31,050 102,000 9,800 111,800 618,600

FINANCIAL ACCOUNTING
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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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: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $102,000 is collected from the patients during the year, and $9,800 of price adjustments are granted to individuals. b. Actual contractual adjustments total $157,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. A Answer is not complete. No Transaction General Journal 1a Patient Accounts Receivable-Patients Revenues-Without Donor Restrictions-Patient Service Revenue B 1b Contractual Adjustments Patient Accounts Receivable-Patients C 1c Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments D 2a Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients E 2b1 Contractual Adjustments Allowance for Contractual Adjustments F 2b2 Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit Credit 980,000 > 980,000 154,400 154,400 31,050 31,050 102,000 9,800 111,800 618,600
Transcribed Image Text: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: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $102,000 is collected from the patients during the year, and $9,800 of price adjustments are granted to individuals. b. Actual contractual adjustments total $157,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. A Answer is not complete. No Transaction General Journal 1a Patient Accounts Receivable-Patients Revenues-Without Donor Restrictions-Patient Service Revenue B 1b Contractual Adjustments Patient Accounts Receivable-Patients C 1c Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments D 2a Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients E 2b1 Contractual Adjustments Allowance for Contractual Adjustments F 2b2 Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit Credit 980,000 > 980,000 154,400 154,400 31,050 31,050 102,000 9,800 111,800 618,600
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