Problem 3,5,&8

Chapter 22
Problem 3
(a) Cash ....................................................................................................... 20,000,000

Bonds Payable............................................................................... 20,000,000
Cash ....................................................................................................... 5,000,000
Revenues—Temporarily Restricted Contributions ................... 5,000,000
(b) Construction in Progress ..................................................................... 7,000,000

Cash................................................................................................. 7,000,000
(c) Expenses—Operation and Maintenance of Plant

(Interest Expense).......................................................................... 800,000
Cash.......................................................................................... 800,000
(d) Building................................................................................................... 25,000,000

7,000,000
Construction in Progress...............................................................
Cash................................................................................................. 16,000,000
Retained Percentage—Liability to Contractor ....................... 2,000,000
Reclassifications Out—Temporarily Restricted—Satisfaction of
5,000,000
Plant Restrictions............................................................................
Reclassifications In—Unrestricted—Satisfaction of Plant
5,000,000
Restrictions ..........................................................................
(e) Mortgage Payable .............................................................................. 2,000,000

Expenses—Operation and Maintenance of Plant
(Interest Expense).......................................................................... 800,000
Cash.......................................................................................... 2,800,000
(f) Land........................................................................................................ 200,000

Building................................................................................................... 350,000
Mortgage Payable ....................................................................... 90,000
Revenues—Unrestricted Contributions ..................................... 460,000
(g) Contributions Receivable................................................................... 200,000

Revenues—Temporarily Restricted Contributions ................... 200,000
Expenses—Institutional Support (Provision for Uncollectible
Contributions) ................................................................................ 20,000
Allowance for Uncollectible Contributions ....................... 20,000
(h) Investments ........................................................................................... 500,000

Revenues—Temporarily Restricted Contributions ................... 500,000
(i) Cash ....................................................................................................... 10,000
Revenues—Temporarily Restricted Investment Income ........ 10,000
(j) Expenses—Operation and Maintenance of Plant

(Depreciation Expense) ............................................................... 25,000
Accumulated Depreciation................................................. 25,000
(2) USLS Private University

Statement of Activities
For Period Ended June 30, 20xx
Temporarily Permanently
Unrestricted Restricted Restricted Total
Changes in net assets:

Revenues and gains:
Contributions ................................................... P 460,000 P 5,700,000 P6,160,000

Other investment earnings ........................... 0 10,000 10,000
Total unrestricted revenues and gains.. P 460,000 P 5,710,000 P 0 P6,170,000
Net assets released from restrictions:
Satisfaction of plant acquisition restrictions ... 5,000,000 (5,000,000)* 0
Total revenues and gains and other support P5,460,000 P 710,000 P 0 P6,170,000
Expenses:
Operations and maintenance of plant .......... P1,625,000 P1,625,000
Institutional support ............................................. 20,000 20,000
Total expenses ................................................ P1,645,000 P 0 P 0 P1,645,000
Increase (decrease) in net assets ......... P3,815,000 P 710,000 P 0 P4,525,000
*Note to Instructor: The reclassification amount would total P25,000 if USLS’s policy is to release
the restrictions over the life of the assets rather than when placed into operation
Problem 5
(1) Patient service revenues include charges to patients for routine services, nursing services,
and professional services.
Other operating revenues include revenues from services other than health care provided
to patients as well as from sales and services to persons other than patients.
Nonoperating revenues are primarily from gifts, grants, and investment income and gains
that are peripheral or incidental to the major operation of the hospital.
(2) a. OO
b. N
c. PS
d. PS
e. N
f. N
g. OO
h. PS
i. OO
j. PS
k. N
Problem 8
Pure Air Rehabilitation Hospital
Statement of Activities
For Period Ended December 31, 20x9
Temporarily Permanently
Unrestricted Restricted Restricted Total
Patient service revenues (net of $26,000
contractual adjustments).................................... P 714,000 P 714,000
Other operating revenues:
Seminar income .................................................... P 23,000 P 23,000
Child day care income........................................ 15,000 15,000
Parking fees ............................................................ 4,500 4,500
Total other operating revenue ...................... P 42,500 P 42,500
Total operating revenues.......................................... P 756,500 P 756,500
Operating expenses:
Nursing services ..................................................... P 230,000 P 230,000
Professional fees .................................................... 340,000 340,000
General and administrative ................................ 150,000 150,000
Depreciation expense ......................................... 90,000 90,000
Interest expense .................................................... 13,000 13,000
Repairs and maintenance .................................. 110,000 110,000
Provision for uncollectibles .................................. 14,000 14,000
Total operating expenses ............................... P 947,000 P 947,000
Loss from operations .................................................. P(190,500) P (190,500)
Nonoperating revenue:
Interest income...................................................... P 3,000 P 3,000
Contributions .......................................................... P 18,000 18,000
Endowment income............................................. 120,000 120,000
Gains on sale of endowments............................ 56,000 P 0 56,000
Total nonoperating revenue.......................... P 3,000 P194,000 P 0 P 197,000
Change in net assets ................................................. P(187,500) P194,000 P 0 P 6,500
Net assets, January 1, 20X9 ...................................... 800,000 755,000 750,000 2,305,000
Net assets, December 31, 20X9 ............................... P 612,500 P949,000 P750,000 P2,311,500

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Chapter 22

(a) Cash ....................................................................................................... 20,000,000

(b) Construction in Progress ..................................................................... 7,000,000

(c) Expenses—Operation and Maintenance of Plant

(d) Building................................................................................................... 25,000,000

(e) Mortgage Payable .............................................................................. 2,000,000

(f) Land........................................................................................................ 200,000

(g) Contributions Receivable................................................................... 200,000

(h) Investments ........................................................................................... 500,000

(j) Expenses—Operation and Maintenance of Plant

(2) USLS Private University

Changes in net assets:

Contributions ................................................... P 460,000 P 5,700,000 P6,160,000

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