The Edwards Lake Community Hospital balance sheet as of

The Edwards Lake Community Hospital balance sheet as of December 31, 2019, follows.

EDWARDS LAKE COMMUNITY HOSPITAL
Balance Sheet
As of December 31, 2019
Assets         
Current assets:         
Cash and Cash Equivalents     $352,400  
Accounts and notes receivable (net of uncollectible accounts of $16,500)      27,200  
Inventory      82,200  
Total current assets      461,800  
Assets limited as to use:         
Cash $17,840      
Investments  232,720      
Total assets limited as to use      250,560  
Property, plant, and equipment:         
Land  213,600      
Buildings (net of accumulated depreciation of $1,623,700)  2,896,500      
Equipment (net of accumulated depreciation of $1,025,200)  1,860,200      
Total property, plant, and equipment      4,970,300  
Total assets     $5,682,660  
Liabilities and Net Assets         
Current liabilities:         
Accounts payable     $19,900  
Accrued payroll      46,400  
Current portion of mortgage payable      535,000  
Total current liabilities      601,300  
Long-term debt—mortgage payable      2,570,000  
Total liabilities      3,171,300  
Net assets:         
Without donor restrictions         
Undesignated  2,086,260      
Designated for plant  249,860      
With donor restrictions  175,240   2,511,360  
Total liabilities and net assets     $5,682,660  

 


The following are the transactions of Edwards Lake Community Hospital during the fiscal year ended December 31, 2020.


(1) Information related to accrual of revenues and gains is as follows:
 

   
Patient services revenue, gross$3,501,600
Charity care 214,760
Contractual adjustments to patient service revenues 1,527,000
Other operating revenues 1,000,150


(2) Cash received includes
 

   
Interest on investments in Assets Limited as to Use 8,050
Collections of receivables 2,964,100


 


(3) Expenses of $894,500 were recorded in accounts payable and $1,458,590 in accrued payroll. Because some of the nursing expenses met a net asset restriction, $97,500 was released from restrictions.

   
Administration expenses 449,980 
General services expenses 526,110 
Nursing services expenses 1,032,500 
Other professional services expenses 344,500 


(4) Cash paid includes:
 

   
Interest expense (allocated half to nursing services and half to general services)$287,000
Payment on mortgage principal 535,000
Accounts payable for purchases 838,200
Accrued payroll 1,283,000


(5) Interest of $1,530 accrued on investments in Assets Limited as to Use.
(6) Depreciation charges for the year amounted to $120,500 for the buildings and $132,000 for equipment. Depreciation was allocated 45 percent to nursing services, 15 percent to other professional services and 20 percent to each administrative and general services.
(7) Other information:
      (a) Provision for uncollectible receivables was determined to be adequate.
      (b) Supplies inventory balances:

 

 12/31/2019 12/31/2020 
Administration $10,100   $8,700  
General services  10,800    12,500  
Nursing services  20,500    18,200  
Other professional services  40,800    47,000  
Totals $82,200   $86,400  

     (c) Portion of mortgage payable due within one year, $535,000.

(8) A $677 unrealized loss on investments occurred.
(9) Nominal accounts were closed. Necessary adjustments were made to increase the Net Assets—Without Donor Restrictions, Designated for Plant.

  1. Required

    a-1. Prepare journal entry for the preceding transactions during the fiscal year ended December 31, 2020, assuming that Edwards Lake Community Hospital is a not-for-profit hospital.

  2. a-2. Prepare closing entries for the fiscal year ended December 31, 2020, assuming that Edwards Lake Community Hospital is a not-for-profit hospital.

  3. b. Prepare a balance sheet as of December 31, 2020.

  4. c-1. Prepare a statement of operations for the year ended December 31, 2020.

  5. c-2. Prepare a statement of changes in net assets for the year ended December 31, 2020.

  6. d. Prepare a statement of cash flows for the year ended December 31, 2020.


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