Question

P 19-1

P 19-1 Statement of activities- Hospital

The following events wererecorded on the books of Mercy Hospital for the year ended

December 31, 2012.

1.) Revenue from patientservices totaled $16,000,000. The allowance for uncollectibles wasestablised

at $3,400,000. of the$16,000,000 revenue, $6,000,000 was recognized under costreinbursement agreements.

This revenue is subject toaudit and retroactive adjustment by third-party payers (estimatedadjustments

are included in the allowanceaccoun).

2.) Patient service revenue isaccounted for at established rates on the accrual basis.

3.) Other operating revenuetotaled $346,000, of which $160,000 was from specific purposefunds.

4.) Mercy received $410,000in unrestricted gifts and bequests. They are recorded at fairmarket value

when received.

5.) Endowment funds earned$160,000 in unrestricted income.

6.) Biard desgnated fundsearned $82,000 in income.

7.( Mercy's operatingexpenses for the year amounted to $13,370,000. This included$500,000 in

straight-linedepreciation.

Required:

Prepare a statement ofactivities for Mercy Hospital for the year ended December31,2012.