Reference no: EM131526001
Question: During 2011, the following transactions were recorded by the Baton Rouge Community Hospital, a private-sector, not-for-profit institution.
1. Gross charges for patient services, all charged to Patient Accounts Receivable, amounted to $1,200,000. Contractual adjustments with third party payors amounted to $300,000.
2. Charity services, not included in transaction 1, would amount to $100,000, had billings been made at gross amounts.
3. Other revenues, received in cash, were parking lot, $20,000; cafeteria, $15,000; gift shop, $5,000.
4. Cash gifts for cancer research amounted to $20,000 for the year. During the year, $35,000 was expended for cancer research technicians salaries (Debit Operating Expense-Salaries and Benefits).
5. Mortgage bond payments amounted to $50,000 for principal and $40,000 for interest. Assume unrestricted resources are used.
6. During the year, the hospital received, in cash, unrestricted contributions of $40,000 and unrestricted income of $60,000 from endowment investments. (It is the hospital's practice to treat unrestricted gifts as nonoperating income.)
7. New equipment, costing $120,000, was acquired, using donor-restricted cash that was on hand at the beginning of the year. Baton Rouge's policy is to record all equipment in the unrestricted net asset class.
8. An old piece of lab equipment that originally cost $50,000 and that had an undepreciated cost of $10,000 was sold for $8,000 cash.
9. Pledges made in 2011 for use in 2012 that were unrestricted as to purpose were collected in the amount of $80,000. The $80,000 had been recorded in the Temporarily Restricted Net Asset Class. At the end of 2012, pledges received in the amount of $120,000 are intended to be paid and used for unrestricted purposes in 2013.
10. Cash contributions were received as follows: temporarily restricted for purposes other than plant, $40,000; temporarily restricted for plant acquisition, $30,000.
11. Bills totaling $200,000 were received for the following items:
12. Depreciation of plant and equipment amounted to $70,000.
Utilities 120,000
Insurance 80,000
13. Cash payments on vouchers payable amounted to $180,000. Another $800,000 was expended on wages and benefits. Cash collections of patient accounts receivable amounted to $1,080,000.
14. Closing entries were prepared.
a. Record the transactions in the general journal of the Baton Rouge Community Hospital.
b. Prepare, in good form, a Statement of Operations for the Baton Rouge Community Hospital for the year ended December 31, 2012.