Not-for-Profit Hospital. The Phelps Community Hospital balance sheet as of December 31, 2010,…

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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