Record the Following Transactions on the Books of St

question 5

Essay

Record the following transactions on the books of St.Marie's Hospital,a private not-for-profit hospital.
(a)The Hospital billed patients $612,000 for services rendered. Of this amount,4.5% is expected to be uncollectible. Contractual adjustments with insurance companies are expected to total $87,000.
(b)The Hospital received $500,000 in pledges of support in a campaign undertaken to purchase new MRI equipment. All of the pledges are payable within one year and 8% are expected to be uncollectible.
(c)Charity care in the amount of $36,000 (at standard charges)was performed on an indigent patient.
(d)The Hospital collected $487,200 for the services performed in (1)above. Actual contractual adjustments for these services amounted to $89,700. $ 15,900 of receivables were identified as uncollectible and written off.

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Definitions:

Transactions

The financial events that affect the financial statements of a business, involving transfers or exchanges of value between two parties.

Current Ratio

An indicator of a business's capacity to meet its obligations due in the next twelve months.

Calculated

Determined by mathematical methods; involving the process of using mathematical or logical techniques to derive a result.

Measure

A method or tool used to quantify or evaluate a variable or quantity.