ACCOUNTING CHAPTER 3 PRINCIPLES AND PRACTICES OF HEALTH CARE 132 Transactions pl

Question

ACCOUNTING CHAPTER 3 PRINCIPLES AND PRACTICES OF HEALTH CARE 132 Transactions plus multiple statements. St. Catherine's Diagnostic Center had lowing ending balances at December 31, 20x0, for its assets, liabilities, and the fol. 17. accounts. Givens Cash and temporary investments Accounts receivable Allowance for uncollectibles Inventory Plant and equipment Accumulated depreciation Accounts payable Other short-term notes payable Long-term bonds payable Unrestricted net assets Temporarily restricted net assets $300,000 $2,500,000 $200,000 $205,000 5,800,000 312,000 $230,000 $30,000 $400,000 $7,632,800 $200 List and record each 20X1 transaction under the accrual basis of accounting. Then develop a balance sheet at end-of-years 20X0 and 20X1 and a statement of operations anda statement of changes in net assets for the year ended December 31, 20X1. a. The center collected $2,000,000 in cash from outstanding accounts receivable. b. The center purchased $2,000,000 of inventory on credit. c. The center provided $9,100,000 of patient services on credit. d. The center incurred $4,660,000 of labor expenses, which it paid in cash. e. The center consumed $1,930,000 of supplies from its inventory in the provision of its diagnostic services. f. The center paid $45,000 in cash for outstanding short-term notes payable. 9. The center collected $7,650,000 in cash from outstanding accounts receivable. h. The center paid $1,800,000 in cash for outstanding accounts payable. i. The center issued $3,800,000 in long-term bonds that it must pay back. J The center purchased $3,000,000 in new equipment using a short-term note payable. k. The center incurred $51,000 in interest expense, which it paid in cash. I. The center incurred $1,050,000 in general expenses, which it paid in cash. m. T he center made a cash payment of $780,000 toward principal payment of its out- standing bonds. n. A local corporation gave an unrestricted $46,000 cash donation. Hint: this transac- tion increases the unrestricted net assets account.)

Explanation / Answer

A) Journal Entries/Recording Transactions

12,000

B) Balance Sheet

C.

1) Allowance for Uncollectibles is shown directly on liability side, however it can be shown as deduction from Account Receivable

.

Particulars Debit $ Credit $ a) Cash & Temp. Invesments 20,00,000 Account Receivable 20,00,000 b) Inventory 20,00,000 Accounts Payable 20,00,000 c) Account Receivable 91,00,000 Service Revenue 91,00,000 d) Labor Expenses 46,60,000 Cash & Temp. Invesments 46,60,000 e) Cost of Services 19,30,000 Inventory 19,30,000 f) Other Short Term Notes Payable 45,000 Cash & Temp. Invesments 45,000 g) Cash & Temp. Invesments 76,50,000 Account Receivable 76,50,000 h) Accounts Payable 18,00,000 Cash & Temp. Invesments 18,00,000 i) Cash & Temp. Invesments 38,00,000 Long Term Bonds Payable 38,00,000 j) Plant & Equipment 30,00,000 Other Short Term Notes Payable 30,00,000 k) Interest 51,000 Cash & Temp. Invesments 51,000 Statement of Operation 51,000 Interest 51,000 l) General Expenses 10,50,000 Cash & Temp. Invesments 10,50,000 m) Long Term Bonds Payable 7,80,00 Cash & Temp. Invesments 7,80,000 n) Unrestricted Net Assets 46,000 Cash & Temp. Invesments 46,000 o) Cash & Temp. Invesments 4,000 Interest 4,000 Interest 4,000 Statement of Operation 4,000 p) Parent Company 5,18,000 Cash & Temp. Invesments 5,18,000 q) Depreciation 95,000 Plant & Equipment 95,000 Statement of Operation 95,000 Depreciation 95,000 r) Bad debts 12,000 Account Receivable 12,000 Provision for bad debts 12,000 Bad debts 12,000 Statement of Operation 12,000 Provision for bad debts

12,000

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