Question

St. Paterno’s Hospital sees the following events occur in 2017 (prepare the following entries):

Gross charges for patient services, all on account, were $1,000,000. Contractual adjustments with insurance companies amounted to $200,000.

The hospital received pledges for $100,000, to be received in 2018. The funds can be used for any purpose desired by the board.

Cash gifts of $200,000, specifically designated for cancer research, were received from donors.

$75,000 of the funds in Part C above were spent on salaries and benefits for research technicians.

Mortgage bond payments of $40,000 for principal and $30,000 for interest were made using unrestricted resources.

New equipment costing $70,000 was purchased using donor-restricted cash that was on hand at the beginning of the year.

Pledges of $90,000 made in 2016 for use in 2017 were collected.

Invoices of $75,000 for utilities and $12,000 for legal fees incurred this year were received. They will be paid later.

The hospital paid $15,000 for training using temporarily restricted resources that were on hand at the beginning of the year.

$650,000 cash was received related to the entries in Part A above.

Answer 1

	JOURNAL
Sl No.	Date	Particulars	Debit	Credit
A	2017	Patient A/R	$ 1,000,000.00
		Revenues		$ 1,000,000.00
		Contractual Adjustments	$      200,000.00
		Patient A/R		$      200,000.00
B		Contribution Receivables	$      100,000.00
		Revenues - Temporarily Restricted		$      100,000.00
C		Cash	$      200,000.00
		Revenues - Temporarily Restricted		$      200,000.00
D		Operating Exp - salaries and benefits	$        75,000.00
		Cash		$        75,000.00
		Temporarily Restricted assets	$        75,000.00
		Unrestricted Assets		$        75,000.00
E		Operating Exp - Interest	$        30,000.00
		Mortgage	$        40,000.00
		Cash		$        70,000.00
F		Equipment	$        70,000.00
		Cash		$        70,000.00
		Temporarily Restricted assets	$        70,000.00
		Unrestricted Assets		$        70,000.00
G		Cash	$        90,000.00
		Contribution Receivable		$        90,000.00
H		Operating Expenses - Utilities	$        75,000.00
		Operating Expenses - Legal fees	$        12,000.00
		Accounts Payable		$        87,000.00
I		Operating Expenses - Trainning	$        15,000.00
		Cash		$        15,000.00
		Temporarily Restricted assets	$        15,000.00
		Unrestricted Assets		$        15,000.00
J		Cash	$      650,000.00
		Patient A/R		$      650,000.00