Transactions plus multiple statements. St. Catherine’s Diagnostic Center had the following ending balances at December 31, 20X0, for its assets, liabilities, and net assets accounts.
Givens
Cash and temporary investments $300,000
Accounts receivable $2,500,000
Allowance for uncollectibles $200,000
Inventory $205,000
Plant and equipment $5,800,000
Accumulated depreciation $312,000
Accounts payable $230,000
Other short-term notes payable $30,000
Long-term bonds payable $400,000
Unrestricted net assets $7,632,800
Temporarily restricted net assets $200
List and record each 20X1 transaction under the accrual basis of accounting. Then develop a balance sheet at 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 collected $2,000,000 in cash from outstanding accounts receivable.
b. The center purchased $2,000,000 of inventory on credit.
c. The center provided $9,100,000 of patient services on credit.
d. The center incurred $4,660,000 of labor expenses, which it paid in cash.
e. The center consumed $1,930,000 of supplies from its inventory in the provision of its diagnostic services.
f. The center paid $45,000 in cash for outstanding short-term notes payable.
g. The center collected $7,650,000 in cash from outstanding accounts receivable.
h. The center paid $1,800,000 in cash for outstanding accounts payable.
i. The center issued $3,800,000 in long-term bonds that it must pay back.
j. The center purchased $3,000,000 in new equipment using a short-term note payable.
k. The center incurred $51,000 in interest expense, which it paid in cash.
l. The center incurred $1,050,000 in general expenses, which it paid in cash.
m. The center made a cash payment of $780,000 toward principal payment of its outstanding bonds.
n. A local corporation gave an unrestricted $46,000 cash donation. (Hint: this transaction increases the unrestricted net assets account.)
o. The center received, in cash, $4,000 in interest income from unrestricted temporary investments.
p. The center transferred $518,000 in cash to its parent corporation.
q. The center incurred an annual depreciation expense of $95,000.
r. The center estimated that its provision for bad debt expense is $12,000.