St. Steven's Hospital is a private not-for-profit entity providing health care services to citizens of a small rural community. During the current month, the hospital engaged in the following transactions. Your responsibility, as the Senior Accountant, is to book the appropriate journal entries for St. Steven's for the current month for patient service revenues along with any required adjustments based on the circumstances listed below in parts a) through e) as well as the entries based on the information contained in parts f) and g). a. Based on the hospital's established billing rate, services rendered to patients during the month amounted to $3.2 million. $275,000 of the $3.2 million amount was provided to indigents and will be considered charity care. b. 52.500.000 in patient services rendered will be billed to Alpha Medical Group; a third-party payor. Alpha Medical Group pays for services rendered to its customers based on a rate schedule for the types of procedures provided. Alpha will reimburse the hospital $2.275.000 for the services provided during the current month to its customers. Part of the agreement between St. Steven's and Alpha Medical is that St. Steven's will not bill Alpha's customers for the difference between the amounts that the hospital bills and the amount that Alpha pays the hospital. c. $175,000 in patient services rendered will be billed to uninsured patients which the hospital believes may be collectible. However, based on prior experience with uninsured patients, the Hospital estimates that $75,000 of the $175,000 will still be uncollectible. d. $250,000 in patient services rendered was for services provided for hospital employees. The hospital provides a 50 percent discount for services provided to its employees. e. How will the hospital recognize the $275.000 identified in part a) as the value of charity services provided? f. The hospital is the defendant in a malpractice suit. Attorneys for the hospital are reasonably sure the hospital will be found liable. Their best estimate of the amount of loss is $1,250,000. The hospital carries medical malpractice insurance with a $500.000 deductible clause. g. The hospital has numerous capital assets on its books. Straight-line depreciation on these assets totals $125,000 for the current period.

St. Steven's Hospital is a private not-for-profit entity providing health care services to citizens of a small rural community. During the current month, the hospital engaged in the following transactions. Your responsibility, as the Senior Accountant, is to book the appropriate journal entries for St. Steven's for the current month for patient service revenues along with any required adjustments based on the circumstances listed below in parts a) through e) as well as the entries based on the information contained in parts f) and g). a. Based on the hospital's established billing rate, services rendered to patients during the month amounted to $3.2 million. $275,000 of the $3.2 million amount was provided to indigents and will be considered charity care. b. 52.500.000 in patient services rendered will be billed to Alpha Medical Group; a third-party payor. Alpha Medical Group pays for services rendered to its customers based on a rate schedule for the types of procedures provided. Alpha will reimburse the hospital $2.275.000 for the services provided during the current month to its customers. Part of the agreement between St. Steven's and Alpha Medical is that St. Steven's will not bill Alpha's customers for the difference between the amounts that the hospital bills and the amount that Alpha pays the hospital. c. $175,000 in patient services rendered will be billed to uninsured patients which the hospital believes may be collectible. However, based on prior experience with uninsured patients, the Hospital estimates that $75,000 of the $175,000 will still be uncollectible. d. $250,000 in patient services rendered was for services provided for hospital employees. The hospital provides a 50 percent discount for services provided to its employees. e. How will the hospital recognize the $275.000 identified in part a) as the value of charity services provided? f. The hospital is the defendant in a malpractice suit. Attorneys for the hospital are reasonably sure the hospital will be found liable. Their best estimate of the amount of loss is $1,250,000. The hospital carries medical malpractice insurance with a $500.000 deductible clause. g. The hospital has numerous capital assets on its books. Straight-line depreciation on these assets totals $125,000 for the current period.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 1EA: Magio Company manufactures kitchen equipment used in hospitals. They distribute their products...

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