Question

#5 Problems 1. A not-for-profit hospital, Barnes Hospital, had the following transactions: A. Patients were charged $360,000 for services. Of this amount, $60,000 was acti to the patients. Hospital officials anticipate that $14,000 will be uncollectible. $300,000 was billed to insurance companies and other third-party payors. Offi that these companies will only pay $264,000 after determining reasonable cost procedures. B. Insurance companies and other third-party payors paid $224,000 to cover 80% in A. The remaining amounts from these charges were denied and are not expe collected. c. An unrestricted pledge for $48,000 was received from a wealthy individual, bu cannot be spent for several years. D. A local volunteer contributed services to the hospital to replace a retired worke of these services was $11,000 Required: Prepare journal entries for the above transactions. During 2009, a voluntary health and welfare organization received unrestricted pledg $120,000. 40% were payable in 2009 with the remainder payable in 2010 (for use in Officials estimate that 10% of these pledges will be uncollectible. In addition, a local technician earning $10 per hour working for a hospital, contributed 320 hours of time charitable organization. If not for these donated services, an additional staff person w been hired by the organization. Required: A. B. How much should the organization report as net public support for 2009? How should the organization record the contributed services?

Answer 1

1. Journal Entries in the books of Barnes Hospital

	Particulars	Amount Dr	Amount Cr
A	Patient a/c                                            -Dr	14000
	Insurance Company A/c                      -Dr	36000
	Bank Alc                                                  -Dr	310000
	To Services Alc		360000
	Being Service provided and Amount received
B	Bank Alc                                                -Dr	224000
	A Alc                                                      -Dr	56000
	To Services Alc		280000
	Being Service provided and Amount received
C	Pledge Alc                                          -Dr	48000
	To Wealthy Individual Alc		48000
	Being Pledge Received
D	Services Received Alc                           -Dr	11000
	To Bank Alc		11000
	Being Amount paid for Services