ACCTG 211 Lecture Notes - Lecture 10: Current Liability, Subledger, Accounts Payable
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The Edwards Lake Community Hospital balance sheet as ofDecember 31, 2017, follows. |
EDWARDS LAKE COMMUNITY HOSPITAL | |||||||||
Balance Sheet | |||||||||
As of December 31, 2017 | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and Cash Equivalents | $ | 272,600 | |||||||
Accounts and notes receivable(net of uncollectible accounts of $15,900) | 26,600 | ||||||||
Inventory | 72,600 | ||||||||
Totalcurrent assets | 371,800 | ||||||||
Assets limited as to use: | |||||||||
Cash | $ | 17,240 | |||||||
Investments | 229,720 | ||||||||
Totalassets limited as to use | 246,960 | ||||||||
Property, plant, and equipment: | |||||||||
Land | 210,600 | ||||||||
Buildings (net of accumulateddepreciation of $1,623,100) | 2,893,500 | ||||||||
Equipment (net ofaccumulated depreciation of $1,024,600) | 1,859,000 | ||||||||
Totalproperty, plant, and equipment | 4,963,100 | ||||||||
Total assets | $ | 5,581,860 | |||||||
Liabilities and Net Assets | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 19,300 | |||||||
Accrued payroll | 45,200 | ||||||||
Current portion of mortgagepayable | 505,000 | ||||||||
Totalcurrent liabilities | 569,500 | ||||||||
Long-term debtâmortgage payable | 2,510,000 | ||||||||
Total liabilities | 3,079,500 | ||||||||
Net assets: | |||||||||
Unrestricted | |||||||||
Undesignated | 2,083,260 | ||||||||
Designated for plant | 246,860 | ||||||||
Temporarily restricted | 172,240 | 2,502,360 | |||||||
Total liabilities and net assets | $ | 5,581,860 | |||||||
The following are the transactions of Edwards Lake CommunityHospital during the fiscal year ended December 31, 2017. |
(1) | Information related to accrual of revenues and gains is asfollows: |
Patient services revenue, gross | $ | 3,501,000 |
Charity care | 211,760 | |
Contractual adjustments to patient servicerevenues | 1,521,000 | |
Other operating revenues | 998,950 | |
(2) | Cash received includes: |
Interest on investments in Assets Limited as toUse | 7,450 | |
Collections of receivables | 2,961,100 | |
(3) | Expenses of $891,500 were recorded in accounts payable and$1,454,990 in accrued payroll. Since some of the nursing expensesmet a temporary net asset restriction, $94,500 was released fromtemporary restrictions. |
Administration expenses | 446,980 | |
General services expenses | 524,610 | |
Nursing services expenses | 1,031,900 | |
Other professional services expenses | 343,000 | |
(4) | Cash paid includes: |
Interest expense (allocated half to nursingservices and half to generalservices) | $ | 281,000 |
Payment on mortgage principal | 505,000 | |
Accounts payable for purchases | 837,000 | |
Accrued payroll | 1,280,000 | |
(5) | Interest of $1,230 accrued on investments in Assets Limited asto Use. |
(6) | Depreciation charges for the year amounted to $117,500 for thebuildings and $129,000 for equipment. Depreciation was allocated 45percent to nursing services, 15 percent to other professionalservices and 20 percent to each administrative and generalservices. |
(7) | Other information: |
(a) | Provision for uncollectible receivables was determined to beadequate. |
(b) | Supplies inventory balances: |
12/31/2016 | 12/31/2017 | |||||||
Administration | $ | 8,300 | $ | 7,500 | ||||
General services | 9,000 | 9,500 | ||||||
Nursing services | 17,500 | 17,000 | ||||||
Other professional services | 37,800 | 41,000 | ||||||
Totals | $ | 72,600 | $ | 75,000 | ||||
(c) | Portion of mortgage payable due within one year, $505,000. |
(8) | A $665 unrealized loss on investments occurred. |
(9) | Nominal accounts were closed. Necessary adjustments were made toincrease the Net AssetsâUnrestricted, Designated for Plant. |
a-1. | Prepare journal entry for the preceding transactions during thefiscal year ended December 31, 2017, assuming that Edwards LakeCommunity Hospital is a not-for-profit hospital. (If noentry is required for a transaction/event, select "No Journal EntryRequired" in the first account field.) |