Transactions plus multiple statements. Ambulatory Center, Inc., had the following ending balances for its assets, liabilities, and net assets accounts as of December 31, 20X0.
Givens
Cash $33,000
Accounts receivable $60,000
Allowance for uncollectibles $20,000
Inventory or supplies $8,200
Prepaid insurance $1,800
Long-term investments $20,000
Plant, property, and equipment $3,800,000
Accumulated depreciation $1,750,000
Short-term accounts payable $79,000
Accrued expenses $15,000
Long-term debt $1,055,000
Unrestricted net assets $903,300
Permanently restricted net assets $100,700
List and record each 20X1 transaction under the accrual basis of accounting. Then develop a balance sheet for end-of-years 20X0 and 20X1 and a statement of operations and a statement of changes in net assets for the year ended December 31, 20X1.
a. The center made a cash payment of $65,000 to pay off outstanding accounts payable.
b. The center received $14,000 in cash from a donor who temporarily restricted its use.
(Hint: this transaction increases the temporarily restricted net assets account.)
c. The center provided $3,100,000 of services on credit.
d. The center consumed $4,000 of supplies in the provision of its ambulatory services.
e. The center paid off accrued interest expense of $17,500 in cash.
f. The center collected $2,650,000 in cash from outstanding accounts receivable.
g. The center incurred $17,000 in general expenses that it paid for in cash.
h. The center made a $200,000 cash principal payment toward its long-term debt.
i. The center collected $380,000 in cash from outstanding accounts receivable.
j. The center received $19,000 in cash from an HMO for future capitated services.
k. The center purchased $4,000 of supplies on credit.
l. The center earned, but did not receive, $3,900 in income from its restricted net assets.
The income can be used for general operations. (Hint: this transaction increases interest receivable and is also recorded under revenues, gains, and other support.)
m. The center’s temporarily restricted asset account released $3,500 from its restricted account to its unrestricted account for operations. (Hint: the transfer gets recorded under revenues, gains, and other support.)
n. The center incurred $5,000 in interest expense. The interest expense was recorded but not yet paid in cash.
o. The center incurred $2,560,000 in labor expenses, which it paid for in cash.
p. The center paid $4,000 in advance for insurance expense.
q. The center transferred $4,000 in cash to its parent corporation.
r. The center incurred $200,000 in depreciation expense.
s. The center’s prepaid insurance of $2,400 expired for the year.
t. The center estimated $6,800 in bad debt and established a provision for bad debt expense for the year.