Question

Record the following transactions on the books of St. Hope’s Hospital, a private not-for-profit hospital.

(a) The Hospital billed patients $300,000 for services rendered. Of this amount, 3% expected to be uncollectible. Contractual adjustments with insurance companies are expected to total $42,000.
(b) The Hospital received $240,000 in pledges of support in a campaign undertaken to purchase new MMR equipment. All of the pledges are payable within one year and 8% are expected to be uncollectible.
(c) Charity care in the amount of $34,000 (at standard charges) was performed on an indigent patient.
(d) The Hospital collected $237,600 for the services performed in (1) above. Actual contractual adjustments for these services amounted to $45,700. The remaining receivables were written off as uncollectible.

Answer 1

ANSWER

No.	Account titles and explanation	Debit	Credit
(a)	Patient Accounts Receivable	$300,000
	Operating Revenues - Patient Service Revenue - unrestricted		$300,000
	Operating Expense General Services-Bad Debts	$9,000
	Allowance for Patient Accounts Receivable		$9,000
	Contractual Adjustments - unrestricted	$42,000
	Allowance for Contractual Adjustments		$42,000
(b)	Pledges Receivable	$240,000
	Allowance for Uncollectible Pledges		$19,200
	Nonoperating revenues Contributions-Temporarily Restricted		$220,800
(c)	No Journal Entry
(d)	Cash	$237,600
	Patient Accounts Receivable		$237,600
	Allowance for Contractual Adjustments	$42,000
	Contractual Adjustments	$3,700
	Patient Accounts Receivable		$45,700
	Allowance for Patient Accounts Receivable	$12,000
	Patient Accounts Receivable		$12,000

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