Exercises
98.St. Mark’s is a private not-for-profit hospital. At the end of December 2014, a donor pledged to make five payments of $50,000, beginning on January 1, 2015. The contributions are restricted to pay for operations in those years. The present value of these payments is $223,255, discounted at 6%. The contribution was not restricted as to purpose. Record all entries required for 2014 and 2015.
99.Record the following transactions on the books of St. Marie’s Hospital, a private not-for-profit hospital.
(a)The Hospital billed patients $612,000 for services rendered. Of this amount, 4.5% is expected to be uncollectible. Contractual adjustments with insurance companies are expected to total $87,000.
(b)The Hospital received $500,000 in pledges of support in a campaign undertaken to purchase new MRI equipment. All of the pledges are payable within one year and 8% are expected to be uncollectible.
(c)Charity care in the amount of $36,000 (at standard charges) was performed on an indigent patient.
(d)The Hospital collected $487,200 for the services performed in (1) above. Actual contractual adjustments for these services amounted to $89,700. $ 15,900 of receivables were identified as uncollectible and written off.