Question

Brookdale Hospital hired an inexperienced controller early in 20X4. Near the end of 20X4, the board of directors decided to conduct a major fund-raising campaign. They wished to have the December 31, 20X4, statement of financial position for Brookdale fully conform with current generally accepted principles for hospitals. The trial balance prepared by the controller at December 31, 20X4, follows:

Cash	$	101,000
Investment in Short-Term Marketable Securities		201,600
Investment in Long-Term Marketable Securities		301,400
Interest Receivable		16,400
Accounts Receivable		55,600
Inventory		35,200
Land		121,600
Buildings & Equipment		935,700
Allowance for Depreciation					$	259,400
Accounts Payable						40,200
Mortgage Payable						321,300
Fund Balance						1,147,600
Total	$	1,768,500			$	1,768,500

Your analysis of the contribution’s receivable as of December 31, 20X4, determined that there were unrecognized contributions for the following:

Unrestricted use$40,300 Cancer research 10,800 Purchase of equipment 20,500 Permanently restricted endowment principal 32,000 Total$103,600

2. Short-term investments at year-end consist of $151,600 of funds without donor restrictions and $50,000 of funds restricted for future cancer research. All of the long-term investments are held in the permanently restricted endowment fund.
3. Land is carried at its current market value of $121,600. The original owner purchased the land for $70,500, and at the time of donation to the hospital, it had an appraised value of $97,000.
4. Buildings purchased 11 years ago for $610,500 had an estimated useful life of 30 years. Equipment costing $152,400 was purchased 7 years ago and had an expected life of 10 years. The controller had improperly increased the reported values of the buildings and equipment to their current fair value of $935,700 and had incorrectly computed the accumulated depreciation.
5. The board of directors voted on December 29, 20X4, to designate $101,700 of funds without donor restrictions invested in short-term investments for developing a drug rehabilitation center.

Answer is not complete.

	BROOKDALE HOSPITAL Balance Sheet December 31, 20X4 Assets Current Assets: Cash $101,000 correct Contributions receivable 103,600 correct Investments in marketable securities 201,600 correct Interest receivable 16,400 correct Accounts receivable 55,600 correct Inventory 35,200 correct Total current assets $513,400 Long-term assets: Building & equipment WRONG Accumulated depreciation WRONG Net investment in buildings and equipment $0 Land 97,000 correct Investments in marketable securities 301,400 correct Total long-term assets 398,400 Total assets $911,800 Liabilities Accounts payable $40,200 correct Mortgage payable 321300 correct Total liabilities $361,500 Net assets: Without donor restriction WRONG With donor restriction WRONG Total net assets WRONG Total liabilities and net assets WRONG

Answer 1