Transactions plus multiple statements. The following are the financial transactions for the Family Home Health Care Center, a not-for-profit, business-oriented organization. Beginning balances at January 1, 20X1, for its assets, liabilities, and net assets accounts are shown in the following list.
Givens
Cash $5,500
Accounts receivable $60,000
Allowance for uncollectibles $4,500
Supplies $13,000
Long-term investments $42,000
Properties and equipment $880,000
Accumulated depreciation $90,000
Short-term accounts payable $42,000
Other current liabilities $3,000
Long-term debt $680,000
Unrestricted net assets $169,000
Permanently restricted net assets $12,000
List and record each transaction under the accrual basis of accounting. Then develop a balance sheet as of December 31, 20X1 and 20X0, and a statement of operations for the year ended December 31, 20X1.
a. The center purchased $4,000 of supplies on credit.
b. The center provided $430,000 of home health services on credit.
c. The center consumed $9,000 of supplies in the provision of its home health services.
d. The center provided $250,000 of home health services, and patients paid for services in cash.
e. The center paid cash for $5,000 of supplies in the provision of its home health services.
f. The center paid $24,000 in cash for supplies previously purchased on credit.
g. A donor established a $87,000 permanent endowment fund (in the form of long-term investments) for the center. (Hint: this transaction increases the permanently restricted net assets account.)
h. The center collected $250,000 from patients for outstanding receivables.
i. The center paid $300,000 in cash toward labor expense.
j. The center paid $90,000 in cash toward its long-term loan.
k. The center purchased $35,000 in small equipment on credit. The amount is due within one year.
l. The center incurred $40,000 in general expenses. The center used cash to pay for the general expenses.
m. The center incurred $8,000 in interest expense for the year. A cash payment of $8,000 was made to the bank.
n. The center made a $9,000 cash transfer to its parent corporation.
o. The center recognized labor expense of $4,500 but does not incur a cash payment.
p. The center recognized depreciation expenses of $20,000.
q. The center estimated it would not collect $85,000 of the patient accounts receivable, and established a provision for bad debt.