The following represent a hospital’s inflows and outflows of cash:
• Patient service fees received
• Government grants for operating purposes
• Government grants for specific research programs
• Contribution restricted to construction of a new building
• Salaries and wages
• Supplies
• Interest paid on long-term debt
• Interest paid on short-term operating debt
• Acquisition of capital assets
• Purchases of marketable securities
• Proceeds from sale of marketable securities
• Interest received from investments
• Dividends received from investments
• Proceeds of long-term debt to finance a new building
• Proceeds of short-term borrowings for operating purposes

1. Categorize the cash inflows and outflows as they would be reported in a statement of cash flows assuming that the hospital is government owned.
2. Do the same, this time assuming that the hospital is a not-for-profit.
3. Why did the GASB opt for a four-way classification, whereas the FASB retained for not-for-profits the three-way classification developed for businesses?

  • CreatedAugust 13, 2014
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