Ivory General Hospital, which follows the accounting standards set down by the Financial Accounting Standards Board (FASB)

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Question:

Ivory General Hospital, which follows the accounting standards set down by the Financial Accounting Standards Board (FASB) for nonprofit hospitals and other healthcare providers, had the attached transactions for fiscal year 20X1.

REQUIRED:

Record the attached transactions, in proper form, on the books of Ivory General Hospital for fiscal year 20X1. Indicate in which net asset class (unrestricted (UR), temporarily restricted (TR), or permanently restricted (PR) each entry should be made. Use the letter of the transaction as the date. Omit explanations.

IVORY GENERAL HOSPITAL

TRANSACTIONS RELATING TO GIFTS AND GRANTS

FOR FISCAL YEAR 20X1

(a) A gift of $75,000 was received from Color Corporation. The terms of the gift require that the principal must be held permanently but the income from the principal may be used for whatever purpose the governing board of the hospital deems appropriate. The gift was immediately invested in short term investments.

(b) Laser Company gave the hospital a grant of $400,000 that is restricted to cancer research. The grant money was immediately invested in short term investments.

(c) Hue Corporation pledged to match all funds dollar for dollar that the hospital can raise for a new addition to the hospital to be used as a treatment area for mental patients.

(d) The architect's fees for the hospital addition for the mental unit were paid in the amount of $25,000. These monies will be reimbursed from funds raised for the building addition.

(e) During the year the hospital began their fund raising drive for the mental unit addition. Pledges in the amount of $175,000 and actual cash contributions in the amount of $50,000 were received during the year.

(f) Hue Corporation sent a check in the amount of $50,000 to match the contributions actually received during the year. The unrestricted net asset class was reimbursed for the architect's fees from this money.

(g) Investment income was earned during the year in the following amounts: Color Corporation gift, $6,000; and the Laser Corporation grant, $24,000, which has the same restrictions as the original grant money.

(h) Funds spent on cancer research during the year amounted to $190,000.

(i) The investments from the Color Corporation gift were sold at a gain of $11,000. The total proceeds were reinvested in other short term investments.

(j) Pledges for the mental unit addition collected during the year amounted to $85,000. Hue Corporation sent a check in the same amount as their portion of matching funds.