A private not-for-profit hospital provides medical care for a variety of patients. The following activities occurred in the first quarter of 2020.

1. Charged patients $5,250,000 for medical services. Third party payors (insurance companies) were billed for 75% of that amount. The hospital anticipates that the third party payors will only pay 80% of the amount billed. In addition, they anticipate that of the amounts billed to patients, 10% will be charity care and 5% will be uncollectible.
2. Received a donation of Amazon stock valued at $10,000,000. The donor stipulated that 75% of the stock is to be sold and the proceeds are to be used for the construction of a new cancer treatment center. The remaining 25% is to be retained with dividends used to support equipment purchases.
3. The hospital received $3,000,000 from third party payors and $1,050,000 of the amounts charged to patients in a.
4. The hospital sold the shares of Amazon stock as directed in b for $7,600,000.
5. The hospital received $50,000 of dividends on the remaining shares of Amazon stock.
6. The hospital purchased medical testing equipment for $30,000 utilizing funds generated from the dividends received on Amazon stock.
7. A local doctor volunteered patient care services to the hospital for quarter to help cover the maternity leave for another doctor. The value of those services was $50,000.
8. The hospital paid salaries for the quarter of $1,500,000.
9. The hospital paid operating expenses of $1,000,000 for the quarter.
10. The hospital hired an architect to draw blueprints for the cancer treatment center and received an paid a bill for $50,000 for work completed on the blueprints.

Required:

1. Prepare journal entries for the transactions described above.
2. Prepare a Statement of Activities that reflects the changes in net assets for unrestricted, temporarily restricted, and permanently restricted net assets.

Answer rating: 100% (QA)

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