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St. Joseph's Hospital began operations in December 2019 and had patient service revenues totaling $970,000 (based on customary rates) for the month. Of this, $121,000 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. $100,000 is collected from the patients during the year and $9,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $181,000. 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.) No 1 2 3 4 5 6 Transaction 1a 1b 1c 2a 2b1 2b2 Answer is not complete. General Journal Patient Accounts Receivable-Patients Patient Accounts Receivable-3rd Party Payors Revenues-Without Donor Restrictions Patient Service Revenue Contractual Adjustments Allowance for Contractual Adjustments Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients Contractual Adjustments Allowance for Contractual Adjustments Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors >> ›› 33 333 Debit 121,000 849,000 Credit 970,000

St. Joseph's Hospital began operations in December 2019 and had patient service revenues totaling $970,000 (based on customary rates) for the month. Of this, $121,000 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. $100,000 is collected from the patients during the year and $9,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $181,000. 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.) No 1 2 3 4 5 6 Transaction 1a 1b 1c 2a 2b1 2b2 Answer is not complete. General Journal Patient Accounts Receivable-Patients Patient Accounts Receivable-3rd Party Payors Revenues-Without Donor Restrictions Patient Service Revenue Contractual Adjustments Allowance for Contractual Adjustments Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients Contractual Adjustments Allowance for Contractual Adjustments Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors >> ›› 33 333 Debit 121,000 849,000 Credit 970,000

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 2019 and had patient service revenues totaling $970,000 (based on customary rates) for the month. Of this, $121,000 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 agencles. 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. $100,000 is collected from the patients during the year and $9,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $181,000. 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.) No 1 2 3 4 5 6 Transaction 1a 1b 1c 2a 2b1 2b2 Answer is not complete. General Journal Patient Accounts Receivable-Patients Patient Accounts Receivable-3rd Party Payors Revenues-Without Donor Restrictions-Patient Service Revenue Contractual Adjustments Allowance for Contractual Adjustments Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients Contractual Adjustments Allowance for Contractual Adjustments Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit 121,000 849,000 Credit 970,000
Transcribed Image Text:St. Joseph's Hospital began operations in December 2019 and had patient service revenues totaling $970,000 (based on customary rates) for the month. Of this, $121,000 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 agencles. 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. $100,000 is collected from the patients during the year and $9,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $181,000. 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.) No 1 2 3 4 5 6 Transaction 1a 1b 1c 2a 2b1 2b2 Answer is not complete. General Journal Patient Accounts Receivable-Patients Patient Accounts Receivable-3rd Party Payors Revenues-Without Donor Restrictions-Patient Service Revenue Contractual Adjustments Allowance for Contractual Adjustments Provision for Implicit Price Adjustments Allowance for Implicit Price Adjustments Cash Allowance for Implicit Price Adjustments Patient Accounts Receivable-Patients Contractual Adjustments Allowance for Contractual Adjustments Cash Allowance for Contractual Adjustments Patient Accounts Receivable-3rd Party Payors Debit 121,000 849,000 Credit 970,000
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