Exercise 12-9 General Ledger
Journal Entries debits credits CASH PATIENT ALLOWANCE FOR
1
Patient Accounts Receivable 21,130,000 bb 830,000 ACCOUNTS RECEIVABLE UNCOLLECTABLE ACCOUNTS SUPPLIES CONTRIBUTIONS RECEIVABLE
Unrestricted-Patient Service Revenue 21,130,000 1 17,600,000 1,600,000 9 bb 3,250,000 650,000 bb bb 130,000 bb 2,480,000
2 2,530,000 2,200,000 10 1 21,130,000 4,350,000 1 3 430,000 612,000 1 12 750,000 11 600,000 2,100,000 8
Contractual Adjustments-Unrestricted 4,350,000 4 726,000 21,325,000 13 17,600,000 1 690,000 13 450,000 8
Patient Accounts Receivable 4,350,000 6 500,000 1,767,000 14 430,000 3
7 5,302,000 376,000 15
Provision for Bad Debts 612,000 8 2,100,000 6,410,000 17
Allowance for Uncollectible Accounts 612,000 8 450,000
16 4,050,000
Cash 17,600,000 410,000 2,000,000 832,000 190,000 530,000
Patient Accounts Receivable 17,600,000
ALLOWANCE FOR CASH – ASSETS INVESTMENTS – ASSETS PROPERTY PLANT
2
Cash 2,530,000 UNCOLLECTABLE CONTRIBUTIONS WHOSE USE IS LIMITED WHOSE USE IS LIMITED INVESTMENTS – OTHER & EQUIPMENT
Operating Revenues-Unrestricted-Other 2,530,000 353,000 bb 5 120,000 120,000 17 bb 1,700,000 bb 10,100,000 bb 7,500,000
17 120,000 17 6,410,000 4,000,000 16 10 2,200,000
3
Allowance for Uncollectible Accounts 430,000 17 250,000 17 550,000
Patient Accounts Receivable 430,000 353,000 – 2,070,000 13,060,000 9,700,000
4Cash 726,000 ACCUMULATED ACCOUNTS PAYABLE CURRENT PORTION NONCURRENT
Nonoperating-Unrestricted Gifts & Bequests 326,000 DEPRECIATION 600,000 bb ACCRUED EXPENSES LONG-TERM DEBT LONG-TERM DEBT
Nonoperating Inc-Unrestricted-Income on
Investments of Endowment Funds
400,000
4,600,000 bb 750,000 12 200,000 bb 3,100,000 bb
600,000 14 1,767,000 835,000 13 15 200,000 300,000 15 15 300,000
5
Cash-Assets Whose Use is Limited 120,000 5,200,000 418,000 – 300,000 2,800,000
Nonoperating Investment Income-Limited to capital
improvement
120,000
PERM RESTRICTED NET ASSETS TEMP RESTRICTED NET ASSETS BOARD DESIGNATED UNDESIGNATED
6Cash 500,000 7,007,000 bb 6,136,000 bb 1,700,000 bb 1,644,000 bb
Temporarily Restricted- Investment income 300,000
Permanent Restricted- Investment income 200,000 7,007,000 6,136,000 1,700,000 1,644,000
7
Cash 5,302,000 UNRESTRICTED UNRESTRICTED
Temporarily Restricted- Contributions – Purpose 1,802,000 OPERATING REVENUES NONOPERATING REVENUES
Temporarily Restricted- Contributions – Plant 2,450,000 21,130,000 1 -Patient service 326,000 4 -gifts & bequests
Permanent Restricted- Contributions 1,050,000 400,000 4 -Investment income – endowments
2,530,000 2 -Other revenues 120,000 5 -Investment income – limited to capital improvement
8
Cash 2,100,000 250,000 17 -Investment income – limited to capital improvement
Contributions Receivable 2,100,000 23,660,000 200,000 17 -Net gains on investments
Reclassification from Temp Restr Net Assets 2,100,000 1,296,000
Reclassification to Unrestricted Net Assets 2,100,000 TEMPORARILY RESTRICTED
Reclassification from Temp Restr Net Assets 1,600,000 RECLASSIFICATION FROM Supplies- 9 200,000
Reclassification to Unrestricted Net Assets 1,600,000 RECLASSIFICATION TO TEMP. RESTRICTED NET ASSETS 13 690,000
UNRESTRICTED NET ASSETS 8 2,100,000 Salaries & benefits- 9 1,400,000
10 Property Plant and Equipment 2,200,000 2,100,000 8 9 1,600,000 13 21,325,000
Cash 2,200,000 1,600,000 9 10 2,200,000 Depreciation- 13 600,000
2,200,000 10 5,900,000 Utilities 13 515,000
Reclassification from Temp Restr Net Assets 2,200,000 5,900,000 Insurance- 13 320,000
Reclassification to Unrestricted Net Assets 2,200,000 Interest 15 176,000
25,838,000
11
Contributions Receivable 600,000
Temporarily Restricted- Contributions 600,000
12 Supplies 750,000
Accounts Payable 750,000 Dr Cr
beginning balances 25,990,000 25,990,000
13
Operating Expense-Depreciation 600,000 ending balance 64,048,000 64,048,000 –
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
-Plant Acquisitons-
Satisfaction of:
-TimeRestrictions-
-Program Restrictions-
Exercise 12-9 General Ledger
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
104,173,000 104,173,000
CLOSING ENTRIES debits credits
Unrestricted:
Operating Revenues-Unrestricted-Patient Service Revenue
21,130,000
Operating Revenues-Unrestricted-Other Revenue
2,530,000
Expiration of Time Restrictions
2,100,000 1,942,000
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: 1,700,000 Preclosing
Depreciation
600,000 370,000 closing entry
Salaries and Benefits
22,725,000
Supplies 890,000
320,000
Interest 176,000
Net Assets-Unrestricted-Undesignated 298,000
Net Assets-Unrestricted-Board designated 370,000
4,852,000 NET ASSETS TEMPORARILY
UNDESIGNATED
UNRESTRICTED NET ASSETS
BOARD DESIGNATED
UNRESTRICTED NET ASSETS
Permanently Restricted
Revenues-Permanently Restricted-Contributions
1,050,000 NET ASSETS
Revenues-Permanently Restricted-Other Investment Income
200,000 PERMANENTLY RESTRICTED
Gains on Long-Term Investments
350,000 7,007,000 Preclosing
Net Assets-Permanently Restricted
1,600,000 1,600,000 closing entry
8,607,000
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
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
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
HAVEN HOSPITAL
STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2015
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 $176,000
Post-closing Trial Balances
Cash General Ledger
December 31,
2014
December 31,
2015
Increase
(Decrease)
Debits CASH (2015)
Cash 1,700,000 3,755,700 2,055,700 Beginning balance 1/1 1,700,000
Patient Accounts Receivable (net) 1,700,000 1,976,000 276,000 Collections from patients 2,960,500 5,200,000 Salaries
Contributions Receivable 10,000 12,500 2,500 Collections from 3rd parties 6,210,000 2,191,300 Operating expenses
Investments – Endowment 1,500,000 1,620,000 120,000 Contributions to Endowment 130,000
Property, plant and equipment 4,875,000 5,172,000 297,000 Other Contributions 58,500 307,000 Equipment purchases
Investment Income 25,000 100,000 Payment principal LT Debt
Credits Proceeds – LT debt 600,000 130,000 Purchase Endowment Investments
Accumulated Depreciation 2,107,000 2,557,000 450,000
Accounts Payable 37,500 46,200 8,700 Ending balance 12/31 3,755,700
Long-term Debt 2,282,000 2,782,000 500,000
Net Assets or Net Position – December 31
5,358,500
Net Assets or Net Position – December 31
7,151,000
– –
Debits
Contractual Adjustments 1,040,000
Provision for Bad Debts 33,500
Operating Expenses – Salaries 5,200,000
Operating Expenses – Supplies 2,200,000
Reclassification from Temporarily
Restricted Net Assets (time restrictions) 19,600
Net Losses on Investments – Permanently
Restricted 10,000
Credits
Patient Service Revenue – Unrestricted 10,520,000
Income on Endowments – Unrestricted 25,000
Reclassification to Unrestricted Net Assets 19,600
Contribution Revenue – Unrestricted 36,000
Contribution Revenue – Endowment 130,000
Contribution Revenue – Temporarily
Excess Credits over Debits – Activity Accounts 1,792,500
Beginning Net Assets or Net Position 5,358,500
Ending Net Assets or Net Position 2015 7,151,000
BALANCE SHEET ACCOUNTS
Unrestricted Operating Revenues
Net Patient Service Revenue 9,446,500$
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$
* The title of this statement depends on whether this is a private not-for-profit
(Net Assets) or government-owned (Net Position) hospital
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$
Monterey Hospital
Statement of Operations
For the year ended 12-31-2015
Monterey Hospital
Statement of changes in Net Assets (or Net Position)*
For the year ended 12-31-2015
Cash received from Patients 2,960,500$ Cash received from Patients $ 2,960,500
Cash receive from 3rd party payors 6,210,000 Cash receive from 3rd party payors 6,210,000
Investment income received 25,000 Cash paid to employees (5,200,000)
Cash contributions received (non-endowment) 58,500 Cash paid to suppliers (2,191,300)
Cash paid to employees (5,200,000)
Cash paid to suppliers (2,191,300) Net cash provided by operating activities 1,779,200
Net cash provided by operating activities 1,862,700 Contributions other than for endowments 58,500
Contributions for endowment 130,000
Contributions for endowment 130,000 Net cash provided by noncapital financing activities 188,500
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 Acquisition of capital assets (307,000)
Principal paid on long-term debt (100,000)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from long-term debt 600,000
Purchase of endowment investments (130,000)
Purchases of equipment (307,000) Net cash provided from capital and related financing activities 193,000
Net cash provided from investing activities (437,000) CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of endowment investments (130,000)
Increase in cash 2,055,700 Cash received on investments 25,000
Cash and cash equivalents beginning of year 1,700,000
Cash and cash equivalents end of year 3,755,700$ Net cash provided from intesting activities (105,000)
RECONCILATION OF CHANGE IN NET ASSETS Increase in cash 2,055,700
Cash and cash equivalents beginning of year 1,700,000
Change in Net Assets 1,792,500$ Cash and cash equivalents end of year 3,755,700$
Depreciation expense 460,000
Increase in patient accounts receivable (276,000) RECONCILATION OF OPERATING INCOME (LOSS) TO
Increase in contributions receivable (2,500)
Increase in accounts payable 8,700 Operating Income 1,606,100$
Contributions to permanently restricted endowments (130,000) Depreciation expense 460,000
Loss on endowment investments 10,000 Increase in patient accounts receivable (276,000)
Increase in accounts payable 8,700
Net cash provided by operating activities 1,862,700$ Expiration of time restrictions on temp. restricted net assets (19,600)
Net cash provided by operating activities 1,779,200$
Private Not-for-Profit Hospital
Government Owned Hospital
Monterey Hospital
Monterey Hospital
Statement of Cash Flows
Statement of Cash Flows
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
NET CASH PROVIDED BY OPERATING ACTIVITIES
NET CASH PROVIDED BY OPERATING ACTIVITIES
for the year ended 12-31-2015
for the year ended 12-31-2015
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES