Question: Brookdale Hospital hired an inexperienced controller early in 20X4 Near

Brookdale Hospital hired an inexperienced controller early in 20X4. Near the end of 20X4, the board of directors decided to conduct a major fund-raising campaign. They wished to have the December 31, 20X4, statement of financial position for Brookdale fully conform with current generally accepted principles for hospitals. The trial balance prepared by the controller at December 31, 20X4, follows:

Additional Information
1. Your analysis of the contributions receivable as of December 31, 20X4, determined that there were unrecognized contributions for the following:
Unrestricted use .............. $ 40,000
Cancer research ................ 10,000
Purchase of equipment ............. 20,000
Permanently restricted endowment principal ... 30,000
Total ..................... $100,000

2. Short-term investments at year-end consist of $150,000 of unrestricted funds and $50,000 of funds restricted for future cancer research. All of the long-term investments are held in the permanently restricted endowment fund.
3. Land is carried at its current market value of $120,000. The original owner purchased the land for $70,000, and at the time of donation to the hospital, it had an appraised value of $95,000.
4. Buildings purchased 11 years ago for $600,000 had an estimated useful life of 30 years. Equipment costing $150,000 was purchased 7 years ago and had an expected life of 10 years. The controller had improperly increased the reported values of the buildings and equipment to their current fair value of $935,000 and had incorrectly computed the accumulated depreciation.
5. The board of directors voted on December 29, 20X4, to designate $100,000 of unrestricted funds invested in short-term investments for developing a drug rehabilitation center.

Prepare in good form a balance sheet for Brookdale Hospital at December 31,20X4.
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  • CreatedMay 23, 2014
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