Question

Re Record the following transactions on the books of St. Jacob’s Hospital, a private not-for-profit hospital.  

1. The Hospital billed patients $400,000 for services rendered. Of this amount, 2% expected to be uncollectible. Contractual adjustments with insurance companies are expected to total $42,000.
2. The Hospital received $240,000 in pledges of support in a campaign undertaken to purchase new MMR equipment. All of the pledges are payable within one year and 7% are expected to be uncollectible.
3. Charity care in the amount of $34,000 (at standard charges) was performed on an indigent patient.
4. The Hospital collected $237,600 for the services performed in (1) above. Actual contractual adjustments for these services amounted to $45,700. The remaining receivables were written off as uncollectible.

Answer 1

S.No	Accounts Title and Explanations	Debit	Credit
a	Patient Accounts Receivable	400000
	Operating Revenues - Patient Service Revenue - Unrestricted		400000
	Operating expense General Services - Bad Debts	8000
	Allowance for Patient Accounts Receivable		8000
	Contractual Adjustments - Unrestricted	42000
	Allowance for contractual Adjustments		42000
b	Pledges Receivable	240000
	Allowance for Uncollectible Pledges		16800
	Non operating Revenues Contributions - Temporarily Restricted		223200
c	No Journal Entry
d	Cash	237600
	Patient Accounts Receivable		237600
	Allowance for Contractual Adjustments	42000
	Contractual Adjustments	3700
	Patient Accounts Receivable		45700
	Allowance for Patient Accounts Receivable	108700
	Patient Accounts Receivable		108700