White Valley Presbyterian Hospital is a nonprofit initial care facility. For the hospital’s calendar year ending December 31, 2019 journal entries to record the transactions listed in 1 through 14. below Third-parties payers and direct-pay patients were billed $6,500,000 at the hospital's established billing rates The hospital determined that certain of its patients qualified for charity care and that it would not seek to collect $950,000 at established billing rates from direct-pay patients The hospital estimated contractual adjustments for the year of $1,600,000 The hospital originally estimated uncollectible amounts from direct-pay patients to be $250,000 (recall that original estimated uncollectible amounts reduce revenue; only estimates specific to an individual patient are reported as bad debt expense). The hospital received capitation premiums of $2,500,000. It estimated that the cost of providing this care was $1,800,000 The hospital received payments from third-party payers and direct-pay patients totaling $3,500,000 The hospital received contributions of $1,100,000 that were restricted by donors for building a new urgent care wing The hospital paid salaries and wages of $4,500,000 in cash; these amounts are reported as patient care expense The fair value of investments required to be held in perpetuity increased by $25,000 The hospital received cash from interest and dividend income of $10,000 on investments without donor restrictions The hospital used $1,375,000 of net assets with donor restrictions to construct a new urgent care wing, consistent with the restrictions created by the donors The hospital reported depreciation expense of $475,000 The hospital used drug inventories of $365,000 The hospital incurred other operating costs for patient care of $275,000 on credit.

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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White Valley Presbyterian Hospital is a nonprofit initial care facility. For the hospital’s calendar year ending December 31, 2019

journal entries to record the transactions listed in 1 through 14. below

Third-parties payers and direct-pay patients were billed $6,500,000 at the hospital's established billing rates
The hospital determined that certain of its patients qualified for charity care and that it would not seek to collect $950,000 at established billing rates from direct-pay patients
The hospital estimated contractual adjustments for the year of $1,600,000
The hospital originally estimated uncollectible amounts from direct-pay patients to be $250,000 (recall that original estimated uncollectible amounts reduce revenue; only estimates specific to an individual patient are reported as bad debt expense).
The hospital received capitation premiums of $2,500,000. It estimated that the cost of providing this care was $1,800,000
The hospital received payments from third-party payers and direct-pay patients totaling $3,500,000
The hospital received contributions of $1,100,000 that were restricted by donors for building a new urgent care wing
The hospital paid salaries and wages of $4,500,000 in cash; these amounts are reported as patient care expense
The fair value of investments required to be held in perpetuity increased by $25,000
The hospital received cash from interest and dividend income of $10,000 on investments without donor restrictions
The hospital used $1,375,000 of net assets with donor restrictions to construct a new urgent care wing, consistent with the restrictions created by the donors
The hospital reported depreciation expense of $475,000
The hospital used drug inventories of $365,000
The hospital incurred other operating costs for patient care of $275,000 on credit.

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