Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-1
CHAPTER 12 Accounting for Hospitals and Other Health Care Providers
12-1.
a. CHARITY CARE: CHARITY CARE OCCURS WHEN A HOSPITAL OR OTHER HEALTH CARE
ORGANIZATION PROVIDES CARE TO INDIVIDUALS WHERE THERE IS NO EXPECTATION OF
COLLECTION. SERVICE CHARGES FOR CHARITY CARE ARE NOT RECORDED AS REVENUE.
12-2.
(A) WHEN PROPERTY, PLANT AND EQUIPMENT IS ACQUIRED USING UNRESTRICTED
RESOURCES, THE PROPERTY, PLANT AND EQUIPMENT COULD BE RECORDED AS FIXED
ASSETS IN EITHER THE UNRESTRICTED OR THE TEMPORARILY RESTRICTED CLASS. IF
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-2
12-3.
1. PREMIUMS RECEIVED UNDER CAPITATION AGREEMENTS ARE CLASSIFIED AS
2. CONTRACTUAL ADJUSTMENTS ARE NETTED FROM (UNRESTRICTED) PATIENT SERVICE
3. CHARITY CARE REVENUE IS NOT REPORTED. THE COST OF SUCH SERVICES WILL BE
4. DEPRECIATION EXPENSE IS REPORTED AS AN OPERATING EXPENSE.
12-4.
A. I. NONGOVERNMENTAL NOT–FOR–PROFIT HEALTH CARE ENTITIES HAVE CATEGORY (A)
GAAP DEFINED BY THE FASB, WHICH HAS PASSED SEVERAL STANDARDS THAT APPLY
SPECIFICALLY TO NOT–FOR–PROFIT ORGANIZATIONS, SUCH AS STATEMENTS 116, 117,
124, AND 136. CATEGORY (B) GAAP IS CONTAINED IN THE AICPA HEALTH CARE
GUIDE.
II. THESE SOURCES PROVIDE THAT THREE CLASSES OF NET ASSETS BE USED: PERMANENTLY
FLOWS.
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-3
12-4 CONTINUED
C. I. COMMERCIAL HEALTH CARE ENTITIES HAVE CATEGORY (A) GAAP ESTABLISHED BY
THE FASB, BUT THE STATEMENTS THAT APPLY TO NOT–FOR–PROFIT ORGANIZATIONS,
12-5.
A. (1) A CASH GIFT, RESTRICTED FOR ENDOWMENT, MUST BE RECORDED AND REPORTED
AS PERMANENTLY RESTRICTED NET ASSETS. THE GIFT WOULD BE A REVENUE IN THE
PERMANENTLY RESTRICTED NET ASSET CLASS AND, IN THEORY, SHOULD NEVER BE
TRANSFERRED.
1. TRANSACTIONS WITH THE OWNERS, OTHER THAN IN EXCHANGE FOR SERVICES,
2. TRANSFERS AMONG AFFILIATED ORGANIZATIONS,
3. RECEIPT OF TEMPORARILY OR PERMANENTLY RESTRICTED CONTRIBUTIONS,
.
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-6 (A).
BATON ROUGE COMMUNITY HOSPITAL
GENERAL JOURNAL
DEBITS
CREDITS
1.
PATIENT ACCOUNTS RECEIVABLE
REVENUES-UNRESTRICTED-PATIENT SERVICE REVENUE
1,700,000
1,700,000
CONTRACTUAL ADJUSTMENTS-UNRESTRICTED
PATIENT ACCOUNTS RECEIVABLE
450,000
450,000
2.
NO ENTRY REQUIRED
3.
CASH
OPERATING REVENUES-UNRESTRICTED-OTHER REVENUE
40,000
40,000
4.
CASH
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
20,000
20,000
OPERATING EXPENSE – SALARIES AND BENEFITS
CASH
35,000
35,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
20,000
20,000
(UNDER AN ALTERNATIVE ALLOWED BY THE FASB, $15,000 COULD HAVE BEEN RECORDED
AS CONTRIBUTIONS REVENUE INCREASING UNRESTRICTED NET ASSETS BECAUSE IT WAS
RECEIVED AND EXPENDED IN THE SAME FISCAL PERIOD.)
5.
OPERATING EXPENSE: INTEREST
MORTGAGE BONDS PAYABLE
CASH
33,000
50,000
83,000
6.
CASH
NONOPERATING INCOME-UNRESTRICTED-GIFTS AND
BEQUESTS
NONOPERATING INCOME-UNRESTRICTED-INCOME ON
INVESTMENTS OF ENDOWMENT FUNDS
100,000
40,000
60,000
7.
EQUIPMENT
CASH
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSET CLASS-SATISFACTION OF PP&EQ ACQUISITION
RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSET
CLASS-SATISFACTION OF PLAN ACQUISITION
RESTRICTIONS
140,000
140,000
140,000
140,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-6 (A) (CONTINUED).
DEBITS
CREDITS
8.
8,000
40,000
2,000
50,000
9.
120,000
120,000
10.
70,000
70,000
11.
120,000
80,000
200,000
12.
180,000
180,000
13.
175,000
175,000
800,000
800,000
1,080,000
1,080,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-6 (A) (CONTINUED).
DEBITS
CREDITS
14.
REVENUES-UNRESTRICTED-PATIENT SERVICE REVENUE
OPERATING REVENUES-UNRESTRICTED-OTHER REVENUE
NONOPERATING INCOME–UNRESTRICTED-GIFTS AND
BEQUESTS
NONOPERATING INCOME–UNRESTRICTED-INCOME ON
INVESTMENTS OF ENDOWMENT FUNDS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
CONTRACTUAL ADJUSTMENTS-UNRESTRICTED
OPERATING EXPENSE-DEPRECIATION
OPERATING -LOSS ON SALE OF EQUIPMENT–
UNRESTRICTED
OPERATING EXPENSE-SALARIES AND BENEFITS
OPERATING EXPENSE-UTILITIES
OPERATING EXPENSE-INSURANCE
OPERATING EXPENSE-INTEREST
NET ASSETS-UNRESTRICTED
1,700,000
40,000
40,000
60,000
20,000
140,000
450,000
180,000
2,000
835,000
120,000
80,000
33,000
300,000
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
NET ASSETS – TEMPORARILY RESTRICTED
RECLASSIFICATION FROM TEMPORARILY
RESTRICTED NET ASSETS-SATISFACTION OF
PROGRAM RESTRICTIONS
RECLASSIFICATIONS FROM TEMPORARILY
RESTRICTED NET ASSETS-SATISFACTION OF
PP&EQ ACQUISITION RESTRICTIONS
210,000
50,000
20,000
140,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-6 (B). BATON ROUGE COMMUNITY HOSPITAL
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
UNRESTRICTED REVENUES:
NET PATIENT SERVICE REVENUE (NET OF CONTRACTUAL
ALLOWANCE OF $ 450,000)
OTHER REVENUES
NET ASSETS RELEASED FROM RESTRICTIONS
USED FOR OPERATIONS:
SATISFACTION OF PROGRAM RESTRICTIONS
TOTAL OPERATING REVENUES
$ 1,250,000
40,000
20,000
1,310,000
OPERATING EXPENSES:
SALARIES AND BENEFITS
DEPRECIATION
UTILITIES
INSURANCE
INTEREST
TOTAL OPERATING EXPENSES
OPERATING INCOME (LOSS)
$835,000
180,000
120,000
80,000
33,000
1,248,000
62,000
OTHER INCOME:
UNRESTRICTED GIFTS AND BEQUESTS
INCOME ON INVESTMENTS OF ENDOWMENT FUNDS
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES
NET ASSETS RELEASED FROM RESTRICTIONS
USED FOR PROPERTY, PLANT AND EQUIPMENT
ACQUISITIONS
LOSS OF SALE OF EQUIPMENT
INCREASE IN UNRESTRICTED NET ASSETS
40,000
60,000
100,000
162,000
140,000
(2,000)
$300,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-7. HOPE HOSPITAL
GENERAL JOURNAL
2015
DEBITS
CREDITS
1.
CASH
PLEDGES RECEIVABLE
27,000
27,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-EXPIRATION OF TIME RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
27,000
27,000
2.
CONTRIBUTIONS RECEIVABLE
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
86,000
86,000
3.
OPERATING EXPENSE-NURSE TRAINING
CASH
37,000
37,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSET CLASS-SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
35,000
35,000
4.
CASH
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
40,000
40,000
5.
CASH
NONOPERATING REVENUES-UNRESTRICTED–
CONTRIBUTIONS
175,000
175,000
INVESTMENTS-ASSETS WHOSE USE IS LIMITED BY BOARD FOR
FUTURE PLANT EXPANSION
CASH
175,000
175,000
NET ASSETS-UNRESTRICTED-UNDESIGNATED
NET ASSETS-UNRESTRICTED-DESIGNATED BY BOARD
FOR FUTURE PLANT EXPANSION
175,000
175,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-8. ST. JOSEPH’S HOSPITAL – GENERAL JOURNAL
1.
DEBITS
CREDITS
PATIENT ACCOUNTS RECEIVABLE – PATIENTS
PATIENT ACCOUNTS RECEIVABLE – 3RD PARTY PAYORS
REVENUES-UNRESTRICTED-PATIENT SERVICE
REVENUE
103,000
847,000
950,000
CONTRACTUAL ADJUSTMENTS-UNRESTRICTED
PATIENT ACCOUNTS RECEIVABLE– 3RD PARTY PAYORS
PROVISION FOR – BAD DEBT S
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
169,400
15,450
169,400
15,450
2A.
CASH
PATIENT ACCOUNTS RECEIVABLE – PATIENTS
82,000
82,000
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
PATIENT ACCOUNTS RECEIVABLE– 3RD PARTY PAYORS
9,000
9,000
2B.
CONTRACTUAL ADJUSTMENTS-UNRESTRICTED
PATIENT ACCOUNTS RECEIVABLE – 3RD PARTY PAYORS
1,600
1,600
CASH
PATIENT ACCOUNTS RECEIVABLE – 3RD PARTY PAYORS
676,000
676,000
3. SIMILAR TO THE PROVISION FOR BAD DEBTS, THE CONTRA–REVENUE (CONTRACTUAL
ADJUSTMENT) RECORDED IN 2014 IS AN ESTIMATE. DIFFERENCES BETWEEN THE ORIGINAL
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–10
12-9. SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON
THE INSTRUCTOR’S WEBSITE
PART A HAVEN HOSPITAL
GENERAL JOURNAL
YEAR ENDED DECEMBER 31, 2015
JOURNAL ENTRIES
DEBITS
CREDITS
1
PATIENT ACCOUNTS RECEIVABLE
21,130,000
UNRESTRICTED-PATIENT SERVICE REVENUE
21,130,000
CONTRACTUAL ADJUSTMENTS-UNRESTRICTED
4,350,000
PATIENT ACCOUNTS RECEIVABLE
4,350,000
PROVISION FOR BAD DEBTS
612,000
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
612,000
CASH
17,600,000
PATIENT ACCOUNTS RECEIVABLE
17,600,000
2
CASH
2,530,000
OPERATING REVENUES-UNRESTRICTED-OTHER
2,530,000
3
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
430,000
PATIENT ACCOUNTS RECEIVABLE
430,000
4
CASH
726,000
NONOPERATING-UNRESTRICTED GIFTS & BEQUESTS
326,000
NONOPERATING INC-UNRESTRICTED-INCOME ON
INVESTMENTS OF ENDOWMENT FUNDS
400,000
5
CASH-ASSETS WHOSE USE IS LIMITED
120,000
NONOPERATING INVESTMENT INCOME-LIMITED TO CAPITAL IMPROVEMENT
120,000
6
CASH
500,000
TEMPORARILY RESTRICTED– INVESTMENT INCOME
300,000
PERMANENT RESTRICTED– INVESTMENT INCOME
200,000
7
CASH
5,302,000
TEMPORARILY RESTRICTED– CONTRIBUTIONS – PURPOSE
1,802,000
TEMPORARILY RESTRICTED– CONTRIBUTIONS – PLANT
2,450,000
PERMANENT RESTRICTED– CONTRIBUTIONS
1,050,000
8
CASH
2,100,000
CONTRIBUTIONS RECEIVABLE
2,100,000
RECLASSIFICATION FROM TEMP RESTR NET ASSETS
2,100,000
RECLASSIFICATION TO UNRESTRICTED NET ASSETS
2,100,000
CASH
450,000
CONTRIBUTION RECEIVABLE (ENDOWMENT)
450,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–11
9
OPERATING EXPENSE-SALARIES AND BENEFITS
1,400,000
OPERATING EXPENSE-SUPPLIES
200,000
CASH
1,600,000
RECLASSIFICATION FROM TEMP RESTR NET ASSETS
1,600,000
RECLASSIFICATION TO UNRESTRICTED NET ASSETS
1,600,000
10
PROPERTY PLANT AND EQUIPMENT
2,200,000
CASH
2,200,000
RECLASSIFICATION FROM TEMP RESTR NET ASSETS
2,200,000
RECLASSIFICATION TO UNRESTRICTED NET ASSETS
2,200,000
11
CONTRIBUTIONS RECEIVABLE
600,000
TEMPORARILY RESTRICTED– CONTRIBUTIONS
600,000
12
SUPPLIES
750,000
ACCOUNTS PAYABLE
750,000
13
OPERATING EXPENSE-DEPRECIATION
600,000
ACCUMULATED DEPRECIATION
600,000
OPERATING EXPENSE-SUPPLIES
690,000
SUPPLIES
690,000
OPERATING EXPENSE-SALARIES AND BENEFITS
21,325,000
CASH
21,325,000
OPERATING EXPENSE – UTILITIES
515,000
OPERATING EXPENSE – INSURANCE
320,000
ACCOUNTS PAYABLE
835,000
14
ACCOUNTS PAYABLE
1,767,000
CASH
1,767,000
15
LONG TERM DEBT – CURRENT INSTALLMENT
200,000
OPERATING EXPENSE – INTEREST
176,000
CASH
376,000
LONG TERM DEBT – NONCURRENT
300,000
LONG TERM DEBT – CURRENT INSTALLMENT
300,000
16
CASH
4,050,000
INVESTMENTS – OTHER
4,000,000
NET GAINS ON INVESTMENTS – TEMPORARILY RESTRICTED
50,000
17
INVESTMENTS WHOSE USE IS LIMITED
120,000
INVESTMENTS OTHER
6,410,000
CASH – WHOSE USE IS LIMITED
120,000
CASH – WHOSE USE IS LIMITED
6,410,000
INVESTMENTS WHOSE USE IS LIMITED
250,000
INVESTMENTS OTHER
550,000
NET GAINS ON INVESTMENTS – UNRESTRICTED BOARD DESIGNATED
250,000
NET GAINS ON INVESTMENTS – PERMANENTLY RESTRICTED
350,000
NET GAINS ON INVESTMENTS – UNRESTRICTED, UNDESIGNATED
200,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–12
CLOSING ENTRIES
DEBITS
CREDITS
UNRESTRICTED:
OPERATING REVENUES-UNRESTRICTED-PATIENT SERVICE REVENUE
21,130,000
OPERATING REVENUES-UNRESTRICTED-OTHER REVENUE
2,530,000
NONOPERATING INCOME-UNRESTRICTED GIFTS AND BEQUESTS
326,000
NONOPERATING INCOME-INCOME ON INVESTMENTS OF ENDOWMENT FUNDS
400,000
NET GAINS ON LONG TERM INVESTMENTS
200,000
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
2,100,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,600,000
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
2,200,000
CONTRACTUAL ADJUSTMENTS
4,350,000
PROVISION FOR BAD DEBTS
612,000
OPERATING EXPENSES:
DEPRECIATION
600,000
SALARIES AND BENEFITS
22,725,000
SUPPLIES
890,000
UTILITIES
515,000
INSURANCE
320,000
INTEREST
176,000
NET ASSETS-UNRESTRICTED–UNDESIGNATED
298,000
NONOPERATING INVESTMENT INCOME-LIMITED TO CAPITAL IMPROVEMENT
120,000
NET GAINS ON INVESTMENTS – UNRESTRICTED BOARD DESIGNATED
250,000
NET ASSETS-UNRESTRICTED–BOARD DESIGNATED
370,000
TEMPORARILY RESTRICTED
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
4,852,000
REVENUES-TEMPORARILY RESTRICTED-OTHER INVESTMENT INCOME
300,000
GAINS ON LONG-TERM INVESTMENTS-TEMPORARILY RESTRICTED
50,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
2,100,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,600,000
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
2,200,000
NET ASSETS – TEMPORARILY RESTRICTED
(698,000)
PERMANENTLY RESTRICTED
REVENUES-PERMANENTLY RESTRICTED-CONTRIBUTIONS
1,050,000
REVENUES-PERMANENTLY RESTRICTED-OTHER INVESTMENT INCOME
200,000
GAINS ON LONG-TERM INVESTMENTS
350,000
NET ASSETS-PERMANENTLY RESTRICTED
1,600,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–13
12-9 (Part B)
HAVEN HOSPITAL
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30 2015
UNRESTRICTED REVENUES:
PATIENT SERVICE REVENUES — NET OF CONTRACTUAL ADJUSTMENTS &
PROVISION FOR BAD DEBTS
$
16,168,000
OTHER OPERATING REVENUES
2,530,000
TOTAL REVENUES
18,698,000
NET ASSETS RELEASED FROM RESTRICTIONS:
EXPIRATION OF TIME RESTRICTIONS
2,100,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,600,000
TOTAL NET ASSETS RELEASED FROM RESTRICTIONS
3,700,000
TOTAL OPERATING REVENUES
22,398,000
EXPENSES:
SALARIES AND BENEFITS
22,725,000
SUPPLIES
890,000
UTILITIES
515,000
INSURANCE
320,000
DEPRECIATION
600,000
INTEREST
176,000
TOTAL OPERATING EXPENSES
25,226,000
OPERATING LOSS
(2,828,000)
OTHER INCOME
UNRESTRICTED GIFTS AND BEQUESTS
326,000
INCOME ON ENDOWMENT INVESTMENTS
400,000
INCOME ON ASSETS WHOSE USE IS LIMITED
120,000
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS – UNDESIGNATED
200,000
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS – BOARD
DESIGNATED
250,000
TOTAL OTHER INCOME
1,296,000
EXCESS OF REVENUES OVER EXPENSES
(1,532,000)
NET ASSETS RELEASED FROM RESTRICTIONS:
SATISFACTION OF PROPERTY PLANT AND EQUIPMENT RESTRICTIONS
2,200,000
INCREASE IN UNRESTRICTED NET ASSETS
$
668,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–14
12-9 (Part C)
HAVEN HOSPITAL
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30 2015
UNRESTRICTED NET ASSETS:
EXCESS OF REVENUES OVER EXPENSES
(1,532,000)
NET ASSETS RELEASED FROM RESTRICTIONS:
SATISFACTION OF PROPERTY PLANT AND EQUIPMENT RESTRICTIONS
2,200,000
INCREASE IN UNRESTRICTED NET ASSETS
668,000
TEMPORARILY RESTRICTED NET ASSETS:
CONTRIBUTION REVENUE
4,852,000
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS
50,000
OTHER INVESTMENT INCOME
300,000
NET ASSETS RELEASED FROM RESTRICTIONS
(5,900,000)
INCREASE (DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS
(698,000)
PERMANENTLY RESTRICTED NET ASSETS:
CONTRIBUTIONS
1,050,000
GAINS ON LONG-TERM INVESTMENTS
200,000
INVESTMENT INCOME ON ENDOWMENT
350,000
INCREASE IN PERMANENTLY RESTRICTED NET ASSETS
1,600,000
INCREASE IN NET ASSETS
1,570,000
NET ASSETS, JULY 1, 2014
16,487,000
NET ASSETS, JULY 30, 2015
$
18,057,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–15
12-9 (Part D)
HAVEN HOSPITAL
STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2015
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS
$
410,000
PATIENT ACCOUNTS RECEIVABLE (NET OF ALLOWANCE FOR DOUBTFUL
ACCOUNTS)
1,168,000
CONTRIBUTIONS RECEIVABLE (NET OF ALLOWANCE FOR UNCOLLECTIBLE)
177,000
SUPPLIES
190,000
TOTAL CURRENT ASSETS
1,945,000
NONCURRENT ASSETS
INVESTMENTS WHOSE USE IS LIMITED
2,070,000
LONG-TERM INVESTMENTS
13,060,000
PROPERTY, PLANT, AND EQUIPMENT
9,700,000
LESS: ACCUMULATED DEPRECIATION
(5,200,000)
TOTAL ASSETS
$
21,575,000
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
ACCOUNTS PAYABLE
418,000
LONG-TERM DEBT: CURRENT INSTALLMENT
300,000
TOTAL CURRENT LIABILITIES
718,000
LONG–TERM LIABILITIES
2,800,000
TOTAL LIABILITIES
3,518,000
NET ASSETS:
BOARD DESIGNATED
2,070,000
OTHER UNRESTRICTED
1,942,000
TOTAL UNRESTRICTED
4,012,000
TEMPORARILY RESTRICTED
5,438,000
PERMANENTLY RESTRICTED
8,607,000
TOTAL NET ASSETS
18,057,000
TOTAL LIABILITIES AND NET ASSETS
$
21,575,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–16
12-9 (Part E)
HAVEN HOSPITAL
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
CHANGE IN NET ASSETS
$
1,570,000
ADJUSTMENTS TO RECONCILE CHANGE IN NET ASSETS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION
600,000
DECREASE IN PATIENT RECEIVABLE (NET OF ALLOWANCE)
1,432,000
INCREASE IN SUPPLIES
(60,000)
DECREASE IN CONTRIBUTIONS RECEIVABLE (NET OF ALLOWANCE)
1,950,000
INCREASE IN ACCOUNTS PAYABLE
(182,000)
GAINS ON LONG-TERM INVESTMENTS
(850,000)
CONTRIBUTIONS RESTRICTED TO INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT
(2,450,000)
CONTRIBUTIONS RESTRICTED TO LONG-TERM INVESTMENT IN ENDOWMENTS
(1,500,000)
INVESTMENT INCOME RESTRICTED TO ENDOWMENT
(200,000)
CASH FLOWS FROM OPERATING ACTIVITIES
310,000
CASH FLOWS FROM INVESTING ACTIVITIES:
ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
(2,200,000)
PURCHASE OF INVESTMENTS
(6,530,000)
SALE OF INVESTMENTS
4,050,000
CASH FLOWS FROM INVESTING ACTIVITIES
(4,680,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM CONTRIBUTIONS RESTRICTED FOR:
INVESTMENT IN PROPERTY, PLANT, AND EQUIPMENT
2,450,000
INVESTMENT IN ENDOWMENTS
1,500,000
INCOME RESTRICTED TO ENDOWMENT
200,000
PAYMENTS ON LONG-TERM DEBT
(200,000)
CASH FLOWS FROM FINANCING ACTIVITIES
3,950,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(420,000)
CASH AND CASH EQUIVALENTS, JULY 1, 2014
830,000
CASH AND CASH EQUIVALENTS, JUNE 30, 2015
$
410,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
– CASH PAID FOR INTEREST
$
176,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12-10. (A). SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON
THE INSTRUCTOR’S WEBSITE
MONTEREY HOSPITAL
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 12-31-2015
UNRESTRICTED OPERATING REVENUES
NET PATIENT SERVICE REVENUE
$ 9,446,500
NET ASSETS RELEASED FROM TIME RESTRICTIONS
19,600
TOTAL OPERATING REVENUES
9,466,100
OPERATING EXPENSES
SALARIES
5,200,000
SUPPLIES
2,200,000
DEPRECIATION
460,000
TOTAL OPERATING EXPENSES
7,860,000
OPERATING INCOME (LOSS)
1,606,100
OTHER INCOME
UNRESTRICTED CONTRIBUTIONS
36,000
INVESTMENT INCOME
25,000
TOTAL OTHER INCOME
61,000
INCREASE IN UNRESTRICTED NET ASSETS
$ 1,667,100
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–18
MONTEREY HOSPITAL
STATEMENT OF CHANGES IN NET ASSETS (OR NET POSITION)*
FOR THE YEAR ENDED 12-31-2015
UNRESTRICTED NET ASSETS/POSITION
OPERATING INCOME
$ 1,606,100
NONOPERATING INCOME
61,000
INCREASE IN UNRESTRICTED NET ASSETS (POSITION)
1,667,100
TEMPORARILY RESTRICTED NET ASSETS/POSITION
CONTRIBUTIONS FOR FUTURE YEARS
25,000
NET ASSETS RELEASED FROM TIME RESTRICTIONS
(19,600)
INCREASE IN TEMPORARILY RESTRICTED NET
ASSETS/POSITION
5,400
PERMANENTLY RESTRICTED NET ASSETS/POSITION
ENDOWMENT CONTRIBUTIONS
130,000
NET REALIZED AND UNREALIZED LOSSES ON
ENDOWMENT INVESTMENTS
(10,000)
INCREASE IN PERMANENTLY RESTRICTED NET
ASSETS/POSITION
120,000
INCREASE IN NET ASSETS/POSITION
1,792,500
NET ASSETS/POSITION JANUARY 1
5,358,500
NET ASSETS/POSITION DECEMBER 31
$ 7,151,000
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–19
12-10 (B)
PRIVATE NOT–FOR-PROFIT HOSPITAL
MONTEREY HOSPITAL
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 12-31-2015
CASH FLOWS FROM OPERATING ACTIVITIES
CASH RECEIVED FROM PATIENTS
$ 2,960,500
CASH RECEIVE FROM 3RD PARTY PAYORS
6,210,000
INVESTMENT INCOME RECEIVED
25,000
CASH CONTRIBUTIONS RECEIVED (NON–ENDOWMENT)
58,500
CASH PAID TO EMPLOYEES
(5,200,000)
CASH PAID TO SUPPLIERS
(2,191,300)
NET CASH PROVIDED BY OPERATING ACTIVITIES
1,862,700
CASH FLOWS FROM FINANCING ACTIVITIES
CONTRIBUTIONS FOR ENDOWMENT
130,000
PAYMENT OF PRINCIPAL ON LONG–TERM DEBT
(100,000)
PROCEEDS FROM LONG–TERM DEBT
600,000
NET CASH PROVIDED BY L FINANCING ACTIVITIES
630,000
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF ENDOWMENT INVESTMENTS
(130,000)
PURCHASES OF EQUIPMENT
(307,000)
NET CASH PROVIDED FROM INVESTING ACTIVITIES
(437,000)
INCREASE IN CASH
2,055,700
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR
1,700,000
CASH AND CASH EQUIVALENTS END OF YEAR
$ 3,755,700
RECONCILATION OF CHANGE IN NET ASSETS
NET CASH PROVIDED BY OPERATING ACTIVITIES
CHANGE IN NET ASSETS
$ 1,792,500
DEPRECIATION EXPENSE
460,000
INCREASE IN PATIENT ACCOUNTS RECEIVABLE
(276,000)
INCREASE IN CONTRIBUTIONS RECEIVABLE
(2,500)
INCREASE IN ACCOUNTS PAYABLE
8,700
CONTRIBUTIONS TO PERMANENTLY RESTRICTED ENDOWMENTS
(130,000)
LOSS ON ENDOWMENT INVESTMENTS
10,000
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 1,862,700
Chapter 12 – Accounting for Hospitals and Other Health Care Providers
12–20
12-10 (B) CONTINUED
GOVERNMENT OWNED HOSPITAL
MONTEREY HOSPITAL
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 12-31-2015
CASH FLOWS FROM OPERATING ACTIVITIES
CASH RECEIVED FROM PATIENTS
$ 2,960,500
CASH RECEIVE FROM 3RD PARTY PAYORS
6,210,000
CASH PAID TO EMPLOYEES
(5,200,000)
CASH PAID TO SUPPLIERS
(2,191,300)
NET CASH PROVIDED BY OPERATING ACTIVITIES
1,779,200
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
CONTRIBUTIONS OTHER THAN FOR ENDOWMENTS
58,500
CONTRIBUTIONS FOR ENDOWMENT
130,000
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
188,500
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
ACQUISITION OF CAPITAL ASSETS
(307,000)
PRINCIPAL PAID ON LONG–TERM DEBT
(100,000)
PROCEEDS FROM LONG–TERM DEBT
600,000
NET CASH PROVIDED FROM CAPITAL AND RELATED FINANCING ACTIVITIES
193,000
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF ENDOWMENT INVESTMENTS
(130,000)
CASH RECEIVED ON INVESTMENTS
25,000
NET CASH PROVIDED FROM INTESTING ACTIVITIES
(105,000)
INCREASE IN CASH
2,055,700
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR
1,700,000
CASH AND CASH EQUIVALENTS END OF YEAR
$ 3,755,700
RECONCILATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
OPERATING INCOME
$ 1,606,100
DEPRECIATION EXPENSE
460,000
INCREASE IN PATIENT ACCOUNTS RECEIVABLE
(276,000)
INCREASE IN ACCOUNTS PAYABLE
8,700
EXPIRATION OF TIME RESTRICTIONS ON TEMPORILY RESTRICTED NET ASSETS
(19,600)
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 1,779,200