St. Josephs Hospital began operations in December 2019 and had patient service revenues totaling $1,290,000(based on customary
Question:
St. Joseph’s Hospital began operations in December 2019 and had patient service revenues totaling $1,290,000(based on customary rates) for the month. Of this, $141,000 is billed to patients, representing their insurance deductibles and co-payments. The balance is billed to third-party payers, including insurance companies and government health care agencies. St. Joseph estimates that 20 percent of these third-party payer charges will be deducted by contractual adjustment. The Hospital’s fiscal year ends on December 31.
Required:
1. Prepare the journal entries for December 2016. Assume that 15 percent of the amounts billed to patients will be uncollectible.
2. Prepare the journal entries for 2017 assuming the following:
a. $109,000 is collected from the patients during the year and $10,400 is written off.
b. Actual contractual adjustments total $216,000. The remaining receivable from third-party payers is collected.
Essentials of Accounting for Governmental and Not for Profit Organizations
ISBN: 978-1259741012
13th edition
Authors: Paul A. Copley