Exam 14: Health Care Providers

Intermountain Hospital, a not-for-profit health care provider, issued $70 million in term bonds to finance construction of a new wing at its main hospital.Terms of the bond issue require that $5 million of the proceeds of the bond issue be invested in U.S.government securities.The $5 million must be held until maturity of the bonds.The $5 million will increase which class of net assets?

Use the following information to answer Questions Kale Hospital, a not-for-profit entity, received a pledge from a donor in support of a fund raising effort by the Hospital to finance construction of a new facility for cancer treatment.The donor promised to pay $2 million in equal annual installments of $200,000 over the next 10 years.The present value of the gift at the risk-free interest rate is $1,472,000. -The amount of unrestricted revenue that should be recognized by Kale in the year of the gift is

Which of the following would normally be considered ongoing or central transactions for a not-for-profit hospital?

In the long run, the health of a hospital depends mainly on the demand for its services and the ability to meet that demand at a reasonable cost.

In the process of general purpose external financial reporting, a health care organization is required to present

The statement of financial position of a not-for-profit health care organization should distinguish among unrestricted, temporarily restricted, and permanently restricted net assets.

A not-for-profit hospital signs a contract with an insurance company in which the company agrees to pay it $9 million in capitation fees for the year July 1, 2011, through June 30, 2012.Between July 1, 2011 and December 31, 2011, the hospital provides services that, at its standard rates, would bill at $5.1 million.Between January 1, 2011, and June 30, 2012, it provides services that it would bill at $4.2 million.For the year ending December 31, 2011, the hospital should recognize capitation revenue of

Use the following information to answer Questions Kale Hospital, a not-for-profit entity, received a pledge from a donor in support of a fund raising effort by the Hospital to finance construction of a new facility for cancer treatment.The donor promised to pay $2 million in equal annual installments of $200,000 over the next 10 years.The present value of the gift at the risk-free interest rate is $1,472,000. -The amount of restricted revenue that should be recognized by Kale in the year of the gift is

In a not-for-profit health care organization, the cost of malpractice must be accrued if it is either probable that impairment has occurred or if the amount of loss can be reasonably estimated.

In prior years, a not-for-profit hospital received funds from a donor who restricted the use of those funds to providing nursing scholarships.During the current year $8,000 of scholarships were awarded.These scholarships should be reported

Hospital revenue usually includes which of the following? Revenue from Educational Programs Unrestricted Gitts a Yes Yes b No No c Yes No d No Yes

Sponsors of not-for-profit health care organizations generally include:

Health care organizations provide uncompensated patient care as a matter of policy but not law.

The Medical Arts Clinic, a well-established health care organization, received a $1,500,000 pledge in fiscal year 2012 that was restricted to cover operating expenses.The gift was received over two years; $600,000 in the first year and $900,000 in the second year.The following table reflects the funds received as well as the amount spent on operating the clinic. June 30,2012 June 30, 2013 Gifts received \ 600,000 \ 900,000 Clinic operating expenses \ 40,000 \ 1,020,000 What should the clinic report as Net Assets Released from Restrictions on the statement of activities for the fiscal year ended

An accountant has encountered a perplexing financial reporting issue related to the hospital for which she is preparing financial statements.The issue is not specifically addressed by FASB statements.To which of the following sources would the accountant probably look first for industry-specific guidance?

Restricted funds of a not-for-profit nursing home are not available for current use; however, the income earned on the funds is available.

Unlike businesses, not-for-profit health care providers often serve patients who they know will be unable to pay any portion of the amounts billed.

Based upon Saint Thomas Hospital's established billing rate structure, the hospital would have earned patient service revenue of $5,100,000 for the year.However, Saint Thomas does not expect to collect this amount because of charity care provided in the amount of $600,000 and contractual allowances to third-party payers of $450,000.How much should Saint Thomas record as patient service revenue for the year?

Jordan an auditor, is performing a routine review of a not-for-profit hospital and noted the following account balances in the statement of operations for the fiscal year ending Sept.30, 2011: Gross patient serv ice rev enue from all \4 ,450,000 services at the hospital's estab lished billing rate Bad debt expense \9 0,000 Contractual adjustments \4 20,000 Calculate the amount the hospital would report as net patient service revenue in its statement of operations for the fiscal year ending Sept.30, 2011.

A specialized health care facility normally purchases their medicine.However, this month a wealthy philanthropist donates the medicine.This medicine should be recorded at fair market value and should be credited directly to: