Record the following transactions for Porter Hospital, a private, nonprofit hosp

Question

Record the following transactions for Porter Hospital, a private, nonprofit hospital: 1. Gross patient services revenues: $25,000,000. Billed to patients. 2. Included in the above revenues are: charity services, $500,000; contractual adjustments, $11,000,000; and estimated uncollectible amounts, $250,000. 3. Purchased equipment by issuing a 5-year note for $200,000. 4. Received cash donations restricted for a capital building addition program, $5,100,000. 5. Incurred and paid $1,700,000 of contractor billings for the capital building program.

Explanation / Answer

Journal

No. Account Name Debit Credit 1. Patient account receivable $25000000 Patient revenues $25000000 (To record Gross patient services revenues) 2. Revenue from patient services-estimated contractual adjustments 11000000 Patient account receivable- allowance for contractual adjustments 11000000 (To record contractual adjustments) Bad debt expense 250000 Patient account receivable- allowance for bad debts 250000 (To record estimated uncollectible amounts) 3. Equipment 200000 Long-term notes payable 200000 (To record purchase of equipment) 4. Cash 5100000 Temporarily restricted support-contributions 5100000 (To record cash donations restricted for a capital building addition program) 5. Temporarily restricted support-contributions 1700000 Cash 1700000 (To record payment to contractor for the capital building program)

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