Not-for-Profit Hospital. The Phelps Community Hospital balance sheet as of December 31, 2010, follows.
a. Record in general journal form the effect of the following transactions during the fiscal year ended December 31, 2011, assuming that Phelps Community Hospital is a not-for-profit hospital.
(1) Summary of revenue journal:
Patient services revenue, gross $3,584,900
Adjustments and allowances:
Contracting agencies 162,000
(2) Summary of cash receipts journal:
Interest on investments in Assets Limited as to Use 7,350
Unrestricted grant from United Fund 300,000
Collections of receivables 3,520,600
(3) Purchases journal:
Administration expenses 167,900
General services expenses 181,200
Nursing services expenses 278,800
Other professional services expenses 263,100
(4) Payroll journal:
Administration expenses 253,700
General services expenses 179,200
Nursing services expenses 659,200
Other professional services expenses 422,400
5) Summary of cash payments journal:
Interest expense 280,000
Payment on mortgage principal 500,000
Accounts payable for purchases 936,800
Accrued payroll 1,579,500
Transfer to Assets Limited as to Use 30,000
(6) The following additional information relates to assets limited as to use:
(a) $10,000 in CDs matured on which $590 in interest was earned.
(b) $30,000 was reinvested in CDs.
(c) $12,300 in equipment was purchased.
(7) Depreciation charges for the year amounted to $117,000 for the buildings and $128,500 for equipment.
(8) Other information:
(a) Provision for uncollectible receivables was increased by $3,800.
(b) Supplies inventory:
(c) Portion of mortgage payable due within one year, $500,000.
(9) Assume that there was no change in fair value of investments at yearend.
(10) Provisions for bad debts, interest expense, and depreciation expense were allocated to functional expense accounts in proportion to their preallocation balances. Nominal accounts were closed.
(11) Reflecting the net increase in Assets Limited as to Use of $25,640 (see transactions 2, 5, and 6), record the increase in Net Assets—Unrestricted, Designated for Plant Replacement.
b. Prepare a balance sheet as of December 31, 2011.
c. Prepare a statement of operations for the year ended December 31, 2011.
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