Listed Below Are Selected Transactions from the City of Watertown $\underline{\text{ Transactions: }}$

question 32

Essay

Listed below are selected transactions from the City of Watertown Hospital. All amounts are in thousands of dollars.

$\underline{\text{ Transactions: }}$
1. The hospital provided patient services during the year that had standard charges of $12,500. Contractual adjustments awarded to patients under contracts with insurance companies and under government programs totaled $2,000. Uncollectible accounts are expected to be approximately $800.
2. Nursing and other professional salaries paid during the year totaled $2,300.
3. Depreciation for the year was $500 for the building and $900 for equipment.
4. Medical supplies costing $2,600 were purchased during the year. The inventory of supplies increased from $200 at the beginning of the year to $300 at year end.
5. The hospital received a $4,000 to be used for the purchase of specialized diagnostic equipment.
6. The hospital received a $500 gift to be used for providing specialized coronary care services to patients.
7. The hospital purchased $2,000 of diagnostic equipment with the donation received for that purpose.
8. The hospital incurred $400 of operating expenses for the care of coronary patients consistent with the purposes of that donation.
9. The hospital issued $5,000 of 20-year, 8% bonds at par at mid-year to finance a new addition for the hospital.
10. The hospital estimates that malpractice claims against the hospital of $400 ultimately will result in liabilities of $100 that will have to be paid-but probably will not have to be paid during the next fiscal year.

$\underline{\text{ Requirement: }}$ Prepare the journal entries required of a government hospital for these transactions.

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Definitions:

Gain-Sharing Plan

A performance-driven compensation strategy where employees receive bonuses based on the company's savings or gains from improved productivity.

Labour Usage Ratios

Measures that compare the amount of labor used to the outputs achieved, helping businesses assess efficiency.

Financially Funded Plans

Employer-sponsored programs designed to provide employees with financial benefits, such as pension plans or health insurance, which are supported by the company's funds.

Organizational Profitability

The ability of an organization to generate more revenue than its expenses, leading to financial gain.