The following information pertains to the activities of Montclair Hospital for the year ended December 31, 2014.
1. Gross patient service revenue................................................... $80,000,000
Charity allowances...................................................................15, 000,000
Contractual discounts to third party payers...................................... 5,000,000
The hospital calculates a provision for un-collectibles at 5 percent of net patient service revenue.
2. Fair market value of noncash donations:
Volunteer workers in public-relations campaign.............................. $200,000
Medical supplies donated by a pharmaceutical firm.......................... 800,000
3. Operating expenses, of which $3,000,000 are unpaid at year-end:
Professional patient care.......................................................... $33,000,000
General services.................................................................... 9,500,000
Nursing services................................................................... 10,000,000
Administrative services.......................................................... 3,500,000
4. The hospital conducts various educational programs for which it received fees of $500,000 during 2014.
5. The cafeteria and gift shop reported profit of $120,000 on sales of $1,320,000; operating costs are recorded as administrative expenses.
6. A retired doctor provided $ l, 000,000 to be used in validating the accuracy of a new cholesterol testing procedure. The funds were spent this year. In addition, $2,800,000 was spent for health education programs, using donor-restricted funds donated last year. Both expenditures were recorded as general services expenses.
7. In July, a donor established a trust in the amount of $6,000,000. Income from the trust is to be paid to the hospital until the donor's death. At that time, the principal is to be given to a local university. A local bank is appointed as trustee. Income received by the trust, and due to be distributed in 2014, amounted to $100,000. As of December 31, the bank had remitted only $60,000 to the hospital.
8. A donor's will provided for a bequest to the hospital of common stock of a public company. The donor had inherited the stock four years ago, when it was worth $1,000,000, from a decedent who purchased it for $500,000. When the donor died on March 15, the stock was worth $1,500,000; at year-end it was worth $1,270,000.
9. A new X-ray machine was purchased for $4,000,000, using unrestricted cash.
Required
Prepare Montclair Hospital's 2014 statement of activities. Ignore beginning and ending net asset balances.