Identify the best answer for each of the following: On July 1, 20X5, Lilydale Hospital's b
Identify the best answer for each of the following:
1. On July 1, 20X5, Lilydale Hospital's board of trustees designated $200,000 for expansion of outpatient facilities. The $200,000 is expected to be expended in the fiscal year ending June 30, 20X8. In Lilydale's statement of net position at June 30, 20X6, this cash should be classified as
a. assets limited as to use
b. a restricted noncurrent asset
c. an unrestricted current asset
d. an unrestricted noncurrent asset
2. During the year ended December 31, 20X5, Melford Hospital received the following donations stated at their respective fair values:
Employee services from members of a religious group $100,000
Medical supplies from an association of physicians $30,000
These supplies were restricted for indigent care and were used for such purpose in 20X5.
How much revenue or gain from donations should Melford report in its 20X5 Statement of Revenues, Expenses, and Changes in Net Position?
3. Glenmore County Hospital's property, plant, and equipment (net of accumulated depreciation) consists of the following:
Equipment (purchased from restricted resources) $2,000,000
What portion of these assets should be reflected in the restricted net position?
4. Which of the following would normally be included in other operating revenues of a government hospital?
a. Unrestricted interest income from an endowment
b. An unrestricted gift
c. Donated services
d. Both items b and c
Questions 5 and 6 are based on the following data:
Under Abbey Hospital's established rate structure, the hospital would have earned patient service revenue of $6 million for the year ended December 31, 20X5. However, Abbey did not expect to collect this amount because of charity allowances of $1 million and discounts of $500,000 to third-party payers. In May 20X5, Abbey purchased bandages from Lee Supply Co. at a cost of $1,000. However, Lee notified Abbey that the invoice was being canceled and that the bandages were being donated to Abbey.
5. For the year ended December 31, 20X5, how much should Abbey report as patient service revenue in its Statement of Revenues, Expenses, and Changes in Net Position?
6. For the year ended December 31, 20X5, Abbey should report the donation of bandages as
a. a $1,000 reduction in operating expenses
b. nonoperating gain of $1,000
c. other operating revenue of $1,000
d. a memorandum entry only.
7. A government hospital is required to present all of the following financial statements except
a. a Statement of Net Position
b. a Statement of Cash Flows
c. a Budgetary Operating Statement
d. a Statement of Revenues, Expenses, and Changes in Net Position
8. GAAP for nongovernment not-for-profit hospitals are primarily established by the
d. American Hospital Association
9. Equity classifications for nongovernment not-for-profit hospitals include all of the following except
a. net investment in capital assets
b. unrestricted net assets
c. permanently restricted net assets
d. temporarily restricted net assets
10. Which of the following statements about a nongovernment not-for-profit hospital Statement of Cash Flows is false?
a. A nongovernment not-for-profit hospital Statement of Cash Flows classifies the acquisition of property as an investing activity.
b. The Statement of Cash Flows for a nongovernment not-for-profit hospital reports only three cash flow classifications.
c. FASB cash flow statement guidance is optional for nongovernment not-for-profit hospitals.
d. The Statement of Cash Flows includes a reconciliation of the change in net position to cash provided by operating activities.