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 $300,000. 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, $120,000. 3. The chief administrative officer was paid her salary of $12,000. 4. The hospital paid its utility bill, $6,000. 5. Depreciation on the equipment was $40,800. 6. Several adults donated their time (worth $6,000) selling merchandise in the hospital gift shop. 7. The hospital billed Medicare $120,000 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 $4,800 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.
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 $300,000. 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, $120,000. 3. The chief administrative officer was paid her salary of $12,000. 4. The hospital paid its utility bill, $6,000. 5. Depreciation on the equipment was $40,800. 6. Several adults donated their time (worth $6,000) selling merchandise in the hospital gift shop. 7. The hospital billed Medicare $120,000 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 $4,800 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Prepare
categorized by function:
1. The hospital billed its uninsured patients for $300,000. 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, $120,000.
3. The chief administrative officer was paid her salary of $12,000.
4. The hospital paid its utility bill, $6,000.
5.
6. Several adults donated their time (worth $6,000) selling merchandise in the hospital gift shop.
7. The hospital billed Medicare $120,000 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 $4,800 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.
Transcribed Image Text:Account
Debit
Credit
Patlent accounts receivable
300,000
Patient service revenues
300,000
To record billings to uninsured patlents.
Cash
165,000
Patient service revenues
135,000 x
To record estimate of uncollectible amounts.
Patlent care expense
120,000
Cash
120,000
To record salarles of nurses and doctors.
Administrative services expense
12,000
Cash
12,000
To record CEO salary,
General services expense
6,000
Cash
6,000 v
To record payment for utility bill.
Depreciation expense
40,800
Accumulated depreciation
40,800
To record depreclation.
No deblt entry needed
No credit entry needed
To record volunteer time.
Patlent accounts recelvable
120,000
Patient service revenues
120,000
To record billings to Medicare.
Provislon for contractual adjustments
48,000
Patlent accounts recelvable
48,000
To record estimated Medicare discount.
Cash
4,800
Contribution revenue (or gains)
4,800
To record donor contribution.
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