Question

The following transactions on the books of St. Marie’s Hospital, a private not-for-profit hospital in 2017.

(a) The Hospital billed patients $612,000 for services rendered. Of this amount, 5% is expected to be uncollectible. Contractual adjustments with insurance companies are expected to total $87,000.

(b) The Hospital received $750,000 in pledges of support in a campaign undertaken to purchase new MRI equipment. All of the pledges are payable within one year and 8% are expected to be uncollectible.

(c) Charity care in the amount of $36,000 (at standard charges) was performed on an indigent patient.

(d) The Hospital collected $487,200 for the services performed in (1) above. Actual contractual adjustments for these services amounted to $89,700. $ 13,700 of receivables were identified as uncollectible and written off.

St. Marie's Hospital
General Journal
	Account	DR	CR
a
b
c	No journal entry required.
d	Cash

Answer 1

	St. Marie's Hospital
a.	Patient Accounts receivable	612000
	Operating revenues - Patient service revenue - unrestricted		612000
	Operating exp. General services - bad debts	30600
	Allowance for patient AR ( 612000 * 5% )		30600
	Contractual adjustements - unrestricted	87000
	Allowance for contrcatual Adjustements		87000
b.	Pledges receivable	750000
	Allowance for uncollectible pledges ( 750000 * 8% )		60000
	Nonoperating revenues contributions - temporarily restricted		690000
c.	No journal entry
d.	Cash	487200
	Patient Accounts receivable		487200
	Allowance for contractual Adjustements	87000
	contractual Adjustements	2700
	Patient Accounts receivable		89700
	Allowance for patient AR	13700
	Patient Accounts receivable		13700