St. Joseph's Hospital began operations In December 2019 and had patient service revenues totaling $980,000 (based on customary rates) for the month. Of this, $122,000 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 2019. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2020 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 $186,000. The remaining receivable from third-party payors is collected. (If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) View transaction Net Journal entry worksheet 1 2 3 4 5 6 Record the patient service revenues for 2019; the insurance deductibles and copayments; and the balance billing to third-party payors. Note: Enter debits before credits. Transaction 1a Record on General Journal Debit Credit Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Patient Accounts Receivable-Patients Provision for Implicit Price Adjustments Revenues-Without Donor Restrictions-Patient Service Revenue Jurnal
St. Joseph's Hospital began operations In December 2019 and had patient service revenues totaling $980,000 (based on customary rates) for the month. Of this, $122,000 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 2019. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2020 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 $186,000. The remaining receivable from third-party payors is collected. (If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) View transaction Net Journal entry worksheet 1 2 3 4 5 6 Record the patient service revenues for 2019; the insurance deductibles and copayments; and the balance billing to third-party payors. Note: Enter debits before credits. Transaction 1a Record on General Journal Debit Credit Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Patient Accounts Receivable-Patients Provision for Implicit Price Adjustments Revenues-Without Donor Restrictions-Patient Service Revenue Jurnal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:St. Joseph's Hospital began operations In December 2019 and had patient service revenues totaling $980,000 (based on customary
rates) for the month. Of this, $122,000 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 2019. Assume 15 percent of the amounts billed to patients will be reduced through implicit
price adjustments.
2. Prepare the journal entries for 2020 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 $186,000. The remaining receivable from third-party payors is collected.
(If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.)
View transaction Net
Journal entry worksheet
1 2 3 4 5 6
Record the patient service revenues for 2019; the insurance deductibles and
copayments; and the balance billing to third-party payors.
Note: Enter debits before credits.
Transaction
1a
Record on
General Journal
Debit
Credit
Contractual Adjustments
Patient Accounts Receivable-3rd Party Payors
Patient Accounts Receivable-Patients
Provision for Implicit Price Adjustments
Revenues-Without Donor Restrictions-Patient Service Revenue
Jurnal
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