Problem #1 Record the following transactions for Porter Hospital, a private, nonprofit hospital: 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.

Question
Asked Oct 17, 2019

Problem #1

 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.

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Expert Answer

Step 1

Journal entries: Journal entries are recorded for every business transaction. It is the first step for preparing accounting records. All transactions are recorded first in journals in the books.

Step 2

Record the journal entries as sh...

Post
Date
Accounts title and explanation
Debit (S)
Credit (S)
Ref.
Patients accounts receivable
$25,000,000
$25,000,000
Patients service revenues
|(To record record gross patients revenue)
Charity services
Contractual adjustments
Patient service revenue - Provision for
uncollectibles
Allowance for - contratual adjustments
$500,000
$11,000,000
$250,000
$11,250,000
S500,000
and uncollectibles
Patient accounts receivable
(To record adjustment entries)
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Post Date Accounts title and explanation Debit (S) Credit (S) Ref. Patients accounts receivable $25,000,000 $25,000,000 Patients service revenues |(To record record gross patients revenue) Charity services Contractual adjustments Patient service revenue - Provision for uncollectibles Allowance for - contratual adjustments $500,000 $11,000,000 $250,000 $11,250,000 S500,000 and uncollectibles Patient accounts receivable (To record adjustment entries)

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