The Edwards Lake Community Hospital balance sheet as of December 31, 2019, follows. EDWARDS LAKE COMMUNITY HOSPITAL
Question:
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.
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.
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.
b. Prepare a balance sheet as of December 31, 2020.
c-1. Prepare a statement of operations for the year ended December 31, 2020.
c-2. Prepare a statement of changes in net assets for the year ended December 31, 2020.
Accounting for Governmental and Nonprofit Entities
ISBN: 978-0078110931
16th Edition
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus