16-19 Revenue and Related Transactions. During its current fiscal year. Evanston

Question

16-19 Revenue and Related Transactions. During its current fiscal year. Evanston General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amount summarized for the year).

1. Services provided to inpatients and outpatients amounted to $9,600,000, of which $450,000 was for charity care, $928,000 was paid by uninsured patients, and $8,222,000 was billed to Medicare, Medicaid, and insurance companies.

2. Donated pharmaceuticals and medical supplies valued at $265,000 were received and utilized as general expenses.

3. Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $5,365,000 of the $8,222,000 billed by the hospital during the year (see transaction 1).

4. An unconditional contribution of $5,000,000 was received in cash from a donor to construct a new facility for care of Alzheimer's patients. The full amount is expendable for that purpose. No activity occurred on this project during the current year.

5. A total of $965,000 was received from the following activities/sources: cafeteria and gift shop sales, $710,000; medical seminars, 125,000; unrestricted transfers from the Evanston General Hospital Foundation $75,000; and fees for medical transcripts, $55,000.

6. Uncollectible accounts totaling $3,250 we're written off. The allowance for uncollectible receivables was increased by $1,170.

REQUIRED

a. Record the preceding transactions in general journal form.

b. Prepare the unrestricted revenues, gains, and other support section of Evanston General Hospital's statement of operations for the current year, following the format in Illustration 16-4.

Explanation / Answer

Journal Entries

b)The unrestricted revenues, gains, and other support section of Evanston General Hospital's statement of operations for the current year:

*($9150000-$2857000) = $6293000

**($965000+$265000)

Event Account,totle and explanation Debit Credit 1. Accounts Receivable -Insurance Co $8222000 cash $928000 Patient Service Revenue $9150000 2 Supplies $265000 Donations $265000 3 Cash $5365000 Contractual Arrangements $2857000   Accounts Receivable -Insurance Co $8222000 4 Cash $5000000 Contribution- Temp Restricted $5000000 5 Cash $965000 Other Revenue $965000 6 Allowance for uncollectible receivables $3250 Accounts receivable $3250 Bad Debt Expense $1170 Allowance for uncollectible receivables $1770

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