NPEs ACCOUNTING FOR A PRIVATE-NFP-HEALTH CARE ENTITIES (HOSPITAL)

The post-closing trial balance for Blakely Hospital as of January 1, 2016, is as follows:
Debit Credit
Cash 79,800
Patient Accounts Receivable 37,000
Allowance for Adjustments and Provision for Uncollectibles 7,000
Inventory of Supplies 14,000
Long-Term Investments 146,200
Property, Plant, and Equipment 2,830,000
Accumulated Depreciation 564,000
Endowment Investments 260,000
Vouchers Payable 16,000
Accrued Expenses 6,000
Mortgage Bonds Payable 150,000
Unrestricted Net Assets 1,158,000
Temporarily Restricted Net Assets 1,250,000
Permanently Restricted Net Assets 216,000
3,367,000 3,367,000

The following events occurred during 2016:

a. Gross charges for hospital service, all charged to accounts receivable, were as follows:
Room and board charges P780,000
Charges for other professional services 321,000

b. Deductions from gross revenues were as follows:

Provision for uncollectible receivables P30,000
Charity service 15,000
Contractual Adjustment allowed to Medicare Patients 10,000

c. The hospital paid P18,000 to retire mortgage bonds payable with an equivalent book value.

d. During the year, Blakely Hospital received general contributions of P50,000 and income of P6,500
from endowment investments. Income received on endowment investments is unrestricted.

e. Patients were billed P3,000 for television rental.

f. P26,000 of donor specified contributions were used to acquire new equipment. The hospital policy
is to release donor restrictions when asset is placed in service.

g. A sterilizer that originally cost P24,000 and had a book value of P2,400 was sold for P3,500.

h. Vouchers totaling P1,191,000 were issued for the following items:

Administrative services expense P120,000
Fiscal services expense 95,000
General services expense 225,000
Nursing services expense 520,000
Other professional services expense 165,000
Supplies (use a perpetual inventory system) 60,000
Expenses accrued on December 31, 2015 6,000

i. Collections on accounts receivable totaled P985,000. Accounts written off as uncollectible

amounted to P11,000. Collections from third-party payers included P70,000 that is restricted to
plant replacement.

j. Cash payments on vouchers payable during the year were P825,000.

k. Supplies of P37,000 were issued to nursing services.

l. During the year, P12,000 of cash income on temporarily restricted investments was received. On
December 31, 2016, there was P800 of accrued interest income on these investments. Earnings are
restricted to plant and expansion.

m. Depreciation of buildings and equipment for the year was P117,000.

n. On December 31, 2016, an accrual of P6,100 was made for interest on mortgage bonds payable.
Interest is considered an Administrative Services Expense.

o. A grateful patient contributed P100,000 in cash. Earnings must accumulate during the patient's
lifetime. Upon death, the principal and accumulated earnings are to be used for plant expansion.
Required:
WRITE YOUR ANSWERS IN A SHEET/S OF SHORT BOND PAPER USING LONG HAND. ANSWER
IT ON YOUR OWN REGARDLESS WHETHER YOU HAVE A SOLUTION MANUAL, OTHERWISE
EXPECT FOR BITTER CONSEQUENCES. THANK YOU. ENJOY LEARNING.

1. Assuming that fund accounting is used, record the events. Identify the appropriate fund for each
transaction.
2. Prepare the closing entries.
3. Prepare the adjusted trial balance.
4. Prepare all relevant financial statements.
5. Prepare the post-closing trial balance.

CHART OF ACCOUNTS

Cash
Cash--limited to Plant Replacement and Expansion
Patient Accounts Receivable
Allowance for Adjustments and Uncollectibles
Accrued Interest Income
Inventory of Supplies
Property, Plant, and Equipment
Accumulated Depreciation

Vouchers Payable
Interest Payable
Mortgage Bonds Payable

Unrestricted Net Assets

Temporarily Restricted Net Assets
Permanently Restricted Net Assets

Patient Service Revenue

Other Operating Revenue--Unrestricted
Nonoperating Revenue--Unrestricted Contributions
Nonoperating Revenue--Unrestricted Endowment Income
Nonoperating Revenue--Unrestricted Gain on Sale
Nonoperating Revenue--Temporarily Restricted Investment Income
Nonoperating Revenue--Temporarily Restricted Contribution

Provision for Uncollectible Receivables

Provision for Depreciation
Contractual Adjustments
Administrative Services Expense
Fiscal Services Expense
General Services Expense
Nursing Services Expense
Other Professional Services Expenses.
Other Expenses

Reclassification OutTemporarily Restricted--Satisfaction of Plant Acquisition

Reclassification InUnrestricted Satisfaction of Plant Acquisition.