Exam 14: Health Care Providers

During the current year, a voluntary health and welfare organization receives $800,000 in unrestricted pledges.Of this amount, $300,000 has been designated by donors for use next year to support operations in the pharmacy.If 20 percent of the unrestricted pledges are expected to be uncollectible, what amount of unrestricted support should the organizations recognize in its current-year financial statements?

The community hospital of Briarwood normally includes proceeds from sales of meals in their cafeteria as

The Gulf Coast bank is holding $750,000 donation in an independent permanent trust with the investment income dedicated for use by the Coastal hospital for operating purposes. The $750,000 principal should be:

In accounting for health care organizations, restricted net assets are:

Charity care provided by a health care organization would be recorded in a contra-revenue account.

For a not-for-profit hospital, which of the following financial statements is NOT required?

A consortium of physicians agrees to provide services to the employees of a large County government.The agreement calls for monthly payments from the County to the consortium in the amount of $200,000 per month.County employees are not billed for services rendered by the consortium.All County employees are required to use the consortium under their health care program any services rendered to County employees by other physicians are not covered under the health plan.During the month the consortium performed services for County employees for which it would have billed $170,000.The consortium referred patients to other health care providers for services they could not perform.The consortium estimates that patients will be billed $10,000 for those services.The amount of revenue that should be recognized for the month by the consortium is

In 2010 St.Joe's Hospital received a $50,000 cash gift to be used to buy supplies and other items for the pediatric department of the hospital.In 2011, St.Joe's purchased puppets and other items to be used in explaining medical procedures to young children.The acquisition of the items causes a NET decrease in which classes of net assets?

The statement of activities must indicate net assets released from restriction and any transfers between funds.

A hospital estimates that, based on past experience, it will incur $5 million in malpractice claims as a result of services rendered in the current period.The hospital carries a malpractice insurance policy with a yearly $2 million deductible clause.The amount that should appear on its year-end financial statement as Claims Expense Loss should be

The LRF Healthcare foundation donated 1,800,000 as a permanent endowment to a Senior Citizen health and welfare organization during the year.The foundation stipulated that the income and investment appreciation be used to maintain its preventive care center for the elderly.The endowment principal had an investment appreciation of $120,000 and investment income of $160,000.The organization spent $140,000 to maintain its preventive care center during the year.What is the amount of change in temporarily restricted net assets that the organization should report?

Not-for-profit health care entities must provide information on the three categories of net asset donor restrictiveness.

During the current year, St.Mary's Hospital a not-for-profit entity earned, based on its normal billing rate, $1 million in patient service revenues.Many of these patients belong to a health plan that has an established pay schedule.Based on the specific services rendered to members of the plan, the hospital estimates that $.05 million will not be collectible from the plan or the patient.Some of the patients are Hospital employees.These employees are given a 50% discount on the services rendered.Employee discounts for the current year total $.01 million.Some of the patients are uninsured and the hospital estimates that, of the amount billed to the uninsured patients, $.2 million will not be collectible bad debts.The amount of net patient service revenues for St.Mary's Hospital for the current year is

A hospital carried a 2-year malpractice insurance policy that allows for retroactive premium adjustments based on experience claims actually incurred.The basic premium is $300,000, payable in advance.At the end of the first year the hospital estimates that it will have to pay an additional $80,000 in premiums as a result of claims filed in the current year and it estimates that it will incur additional premiums in the second year of $100,000 as a result of claims filed in the second year.The amount of insurance expense that should appear on the financial statements at the end of the first year should be

Prepaid health care plans that earn revenue from agreements to provide service record revenue when services are rendered.