Question

St. David’s is a not-for-profit business-oriented hospital. What is the journal entry for the following transaction: During the month, gross patient service revenue amounted to $93,000 of which $82,000 was received in cash. Contractual adjustments to third-party payers amounted to $10,000 (actual, not estimated).

Multiple Choice

• Cash	82,000
  Patient Accounts Receivable	1,000
  Operating Revenues – Unrestricted - Patient Service Revenue		83,000

• Cash	82,000
  Patient Accounts Receivable	11,000
  Operating Revenues – Unrestricted - Patient Service Revenue		93,000
  Contractual Adjustments – Unrestricted	10,000
  Patient Accounts Receivable		10,000

• Cash	82,000
  Patient Accounts Receivable	11,000
  Operating Revenues – Patient Service Revenue, Restricted		93,000
  Bad Debts Expense – Restricted	10,000
  Patient Accounts Receivable		10,000

• Cash	82,000
  Patient Accounts Receivable	11,000
  Operating Revenues – Unrestricted - Patient Service Revenue		93,000
  Operating Revenues-Unrestricted patient Service Revenue	10,000
  Patient Accounts Receivable		10,000

Answer 1

The correct journal entry is:

Cash	82000
Patient accounts receivable	11000
Operating revenues - unrestricted - Patient service revenue		93000
Contractual Adjustments - Unrestricted	10000
Patient accounts receivable		10000