E16-17 Various Unrelated Transactions [LO 16-4] Following are several unrelated transactions involving a hospital. 1. The...

E16-17 Various Unrelated Transactions [LO 16-4]

Following are several unrelated transactions involving a hospital.

The hospital has a contractual agreement with a lender requiring that $600,000 in cash be set aside to meet its future debt payment.

The hospital accrued $1,600,000 in patient service revenues. Charity services of $465,000 were also provided. Contractual adjustments total $585,000.

An increase of $55,000 was recorded for bad debts.

General services of $200,000 were donated by technicians. Normally, the hospital would have purchased these specialized services.

An endowment contribution of $1,600,000 was received.

Investments held by the hospital increased in fair value by $42,000.

The hospital purchased $847,000 in equipment with resources that had been contributed in prior years for such a purchase.

Required

Prepare journal entries to record the foregoing transactions, assuming the hospital is a not-for-profit facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

b.	Prepare journal entries to record the foregoing transactions, assuming the hospital is a business-type government facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Solutions

Expert Solution

Accounts Title & Explanation	Debit	Credit
Assets limited as to use - cash	$600000
Cash		$600000

Accounts & Notes Receivable ($1600000 - $585000)	$1015000
Contractual Adjustments	$585000
Revenue Patient Service Service		$1600000

Revenue Deduction – Charity	$465000
Accounts & Notes Receivable		$465000

Revenue Deduction – Contractual Adjustment	$585000
Accounts & Notes Receivable		$585000

Provision for Bad Debts	$55000
Allowance for Uncollectible Receivable		$55000

General Service Expense	$200000
Contribution - Unrestricted		$200000

Cash	$1600000
Contribution - Permanently Restricted		$1600000

Investment	$42000
Unrealized gain – change in fair value		$42000

Equipment	$847000
Cash		$847000

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record...

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Shamrock Corp. issued $21,400,000 par value 9% convertible bonds at 98. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Bridgeport Company issued $21,400,000 par value 9% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants...

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record...

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Stellar Corp. issued $22,000,000 par value 10% convertible bonds at 97. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Pearl Company issued $22,000,000 par value 10% bonds at 96. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants...

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record...

Exercise 16-1 For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Grand Corp. issued $20,277,000 par value 11% convertible bonds at 99. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. Expenses of issuing the bonds were $76,400. 2. Hoosier Company issued $20,277,000 par value 11% bonds at 98. One detachable stock warrant was issued with each $100 par value bond. At...

Following are several transactions involving a university. In the current fiscal year, the university was notified...

Following are several transactions involving a university. In the current fiscal year, the university was notified by the federal government that next fiscal year it would receive a $500,000 grant for wetlands research. The university received a $500,000 endowment. For the fiscal year, the university recorded $2,500,000 in tuition and fees revenue. Cash refunds of $325,000 were given. The university provided $12,600 in tuition waivers for students with outstanding academic performance. During the year, the university constructed a new street,...

Problem 16-28 (LO. 1) Red, White, and Blue are unrelated corporations engaged in real estate development....

Problem 16-28 (LO. 1) Red, White, and Blue are unrelated corporations engaged in real estate development. The three corporations formed a joint venture (treated as a partnership) to develop a tract of land. a. Complete the statement below that outlines the tax year the joint venture must adopt under the following ownership interests. Assume that the venture does not have a natural business year. Tax Year Ending Interest in Joint Venture Red March 31 60% Blue June 30 20% White...

The following transactions are unrelated: a) Equipment listed at $12,000 was purchased at terms of 4%/10,...

The following transactions are unrelated: a) Equipment listed at $12,000 was purchased at terms of 4%/10, net 30. To take advantage of the discount, the company borrowed $9,000 of the purchase price by issuing a one-year 11 percent note that was repaid with interest at maturity. b) Equipment with a list price of $5,000 was purchased under the terms of 2%/10, net 30. Payment was made 20 days after purchase. c) A company paid $260,000 for land upon which to...

Exercise 2-32 (Algorithmic) (LO. 4) Compute the income tax liability for each of the following unrelated...

Exercise 2-32 (Algorithmic) (LO. 4) Compute the income tax liability for each of the following unrelated C corporations. Click here to access the tax table to use for this problem. a. Darter Corporation has taxable income of $69,700. $ b. Owl Corporation has taxable income of $13,948,000. $ c. Toucan Corporation, a personal service corporation, has taxable income of $365,000. $

Problem 3-50 (a) (LO. 6, 8) During the year, Shanta recorded the following transactions involving capital...

Problem 3-50 (a) (LO. 6, 8) During the year, Shanta recorded the following transactions involving capital assets. Indicate the tax treatment for each item: Transaction Amount Tax Treatment Loss on the sale of a coin collection (held as an investment for 10 years) ($15,000) Gain on the sale of a personal vehicle (purchased six months ago) 1,000 Gain on the sale of corporate stock (purchased two years ago as an investment) 11,000 Loss on the sale of a personal sail...

Problem 1 The following transactions are unrelated: a) Equipment listed at $12,000 was purchased at terms...

Problem 1 The following transactions are unrelated: a) Equipment listed at $12,000 was purchased at terms of 4%/10, net 30. To take advantage of the discount, the company borrowed $9,000 of the purchase price by issuing a one-year 11 percent note that was repaid with interest at maturity. b) Equipment with a list price of $5,000 was purchased under the terms of 2%/10, net 30. Payment was made 20 days after purchase. c) A company paid $260,000 for land upon...

(4) Champion Contractors completed the following transactions and events involving the purchase and operation of equipment...

(4) Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $282,000 cash plus $11,280 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,200 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to enclose the cab and install air conditioning in the loader to enable...

Subjects