Accounting for Hospital transactions

A hospital earned 950,000 as revenue from patients (80% in

cash). Other revenues include bank deposit 300,000, revenue
from lending equipment to others 400,000, rent of cars
200,000, revenue from participating in a collective survey by a
local institute 180,000.
The hospital made a charity tests –free- for population in a
remote area that value 340,000, and contracted with some
companies to provide medical services to employees for a
reduced value of 620,000 (original value or market value of
these services 840,000). An amount of 30,000 of due revenue
from patients are expected not to be collected.
The hospital sold securities it owns for 310,000 with book
value 200,000 and sold old equipment with net book value
120,000 at a price of 80,000. The hospital received a grant
from a previous patient equals 120,000 and a governmental
grant of 450,000.
The hospital purchased medical supplies of 800,000 (used
630,000), X ray device for 820,000, medical equipment 34m.
The expenses relate to the period include: salaries to doctors
1.2m, salaries to nurses 0.740m, administrative expense
220,000, insurance on building and equipment 180,000,
depreciation 230,000, maintenance of machines and cars
118,000 , cost of other supplies 116,000, cost of hygiene tests
270,000, infection control measurements 720,000 and training
for staff 250,000.
The Answer (amounts in thousand)
Dr. Cash 760,000
Accounts & Notes Receivable 190,000
Cr. Revenues – Patient Service 950,000

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Dr. Cash 1,080,000
Cr. Revenue- bank deposit 300,000
revenue - lending equipment 400,000
revenue- rent of cars to others 200,000
revenue - participating in survey 180,000
-----
Dr. A. R 340,000

Cr. Revenue- tests for population in remote area 340,000

---
Dr. Revenue deductions 340
Cr. A. R. 340
-----
At the end of the year:
Dr. Revenue- patients' services 340,000

Cr. Revenue deductions 340 So the balance of A.R. will be zero,

the revenue recorded from this activity is also zero (it was
free).
Dr. Accounts & Notes Receivable 840
Cr. Revenue- patients' service 840
And
Dr. Revenue Deductions – Contractual Adjustment 220 (=840-620)
Cr. Accounts & Notes Receivable 220
At the end of the year all balance of "deductions in revenue" will be
closed in revenue- patients' services acc. And reduces it by this entry:
Dr. Revenue- patients' services
Cr. Revenue Deductions
---------------
Dr. Revenue Deductions – Provision for Uncollectible Accounts 30
Cr. Acc. Receivables 30
---
Dr. Cash 310
Cr. Securities 200
Gains on sale of securities110
---
Dr. Cash 80
Loss on sale of eq. 40
Cr. Equipment 120
-----
Dr. cash 570
Cr. Grant- from patient 120
Grant- from gov. 450
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Dr. Inventory of medical supplies 800
Cr. Acc. Payable 800
Then:
Dr. Education expenses- medical supplies 630
Cr. Inventory of medical supplies 630
-----
Dr. X ray device 820,000
medical equipment 34m
Cr. Cash/ Acc. Payable 34.820m
-------
Dr. salaries to doctors 1.2m,
salaries to nurses 0.740m,
administrative expense 220,000,
insurance on building and equipment 180,000,
maintenance of machines and cars 118,000 ,
cost of other supplies 116,000,
cost of hygiene tests 270,000,
infection control measurements 720,000
training for staff 250,000.
Cr. Cash / Acc. Payable XXXXX amount
---
Dr. depreciation exp. 230,000
Cr. Accumulated depreciation 230,000
==============================================

Q2: Solve similar to the above:

Alsafwa hospital earned 12.4m as revenue from providing
various medical services (70% in cash) and 1% of the amount
due on customers were found to be uncollectible. Other
revenues include interest from financial securities 1.250m,
revenue from leasing equipment to others 1.2m, and
providing vehicles to others 1.8m, and income from property
investment 2.4m.
The hospital made a charity tests –free- for children in villages
that value 630,000, and contracted with some factories to
provide medical services to employees for a reduced value of
800,000 (original value or market value of these services
960,000). Another contract was signed with a university for
providing services to students and staff for a price reduced by
220,000 (original value of contract was included in the
revenue above).
The hospital sold a share of ownership in a local company
works in importing medical items used in some treatments.
The book value of investment is 4m, sold for 6.2m. It also
sold old equipment with net book value 620,000 at a price of
670,000. The hospital received a grant from a Arab Health
Network equals 2.4m and a grant from some local
businessmen equals 500,000.
The hospital purchased medical supplies of 3.6m (used 2.8m),
patient monitor device for 1.4m, surgery equipment 27m and
upgraded IT system for 5.2m.
The expenses relate to the period include: salaries to doctors
6m, salaries to nurses 4.2m, administrative expense 3.8,
insurance on building and equipment 2.6m, depreciation 1.8,
maintenance of machines and cars 0.870m , cost of other
supplies 3.7m, cost of billing system and follow-up collection
4.2m and annual interest on a loan 1.34m.
Record these transactions.