Balance Sheet for a Hospital
Brookdale Hospital hired an inexperienced controller early in 20X4. Near the end of 20X4, the
board of directors decided to conduct a major fund-raising campaign. They wished to have the
December 31, 20X4, statement of financial position for Brookdale fully conform with current gen- ■ erally accepted principles for hospitals. The trial balance prepared by the controller at December 31,
20X4, is as follows:
| Debit | Credit |
Cash | $ 100,000 |
|
Investment in Short-Term Marketable Securities | 200,000 |
|
Investment in Long-Term Marketable Securities | 300,000 |
|
Interest Receivable | 15,000 |
|
Accounts Receivable | 55,000 |
|
Inventory | 35,000 |
|
Land | 120,000 |
|
Buildings and Equipment | 935,000 |
|
Allowance for Depreciation |
| $ 260,000 |
Accounts Payable |
| 40,000 |
Mortgage Payable |
| 320,000 |
Fund Balance |
| 1,140,000 |
Total | $1,760,000 | $1,760,000 |
Additional Information
1. Your analysis of the contributions receivable as of December 31, 20X4, determined that there were unrecognized contributions for the following:
For unrestricted use | $ 40,000 |
For use in cancer research | 10,000 |
For purchase of equipment | 20,000 |
For permanently restricted endowment principal | 30,000 |
Total | $100,000 |
2. Short-term investments at year-end consist of $150,000 of unrestricted funds and $50,000 of funds restricted for future cancer research. All of the long-term investments are held in the permanently restricted endowment fund.
3. Land is carried at its current market value of $120,000. The original owner purchased the land for $70,000, and at the time of donation to the hospital, the land had an appraised value of $95,000.
4. Buildings were purchased 11 years ago for $600,000 and had an estimated useful life of 30 years. Equipment costing $150,000 was purchased 7 years ago and had an expected life of 10 years. The controller had improperly increased the reported values of the buildings and equipment to their current fair value of $935,000 and had incorrectly computed the accumulated depreciation.
5. The board of directors voted on December 29, 20X4, to designate $100,000 of unrestricted funds invested in short-term investments for use in developing a drug rehabilitation center.
Required
Prepare in good form a balance sheet for Brookdale Hospital at December 31, 20X4.
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