Reference no: EM133077887
Question - The following information pertains to the activities of Montclair Hospital for the year ended December 31, 2020.
1. Gross patient service revenue: $75,000,000
Charity allowances: 15,000,000
Contractual discounts to third party payers: 5,000,000
The hospital calculates a provision for uncollectibles at 5% of net patient service revenue.
2. Fair market value of noncash donations:
Volunteer workers in public-relations campaign: $200,000
Medical supplies donated by a pharmaceutical firm: 800,000
3. Operating expenses, of which $3,000,000 are unpaid at year-end:
Professional patient care: $33,000,000
General services: 9,500,000
Nursing services: 10,000,000
Administrative services: 6,600,000
4. The hospital conducts various educational programs for which it received fees of $500,000 during 2020.
5. The cafeteria and gift shop reported profit of $120,000 on sales of $1,320,000; operating costs are recorded as administrative expenses and are included in 3. above.
6. A retired doctor contributed $1,000,000 to be used in validating the accuracy of a new cholesterol testing procedure. The funds were spent this year. In addition, $2,800,000 was spent for health education programs, using donor-restricted funds donated last year. Both expenditures were recorded as general services expenses, and included in 3. above.
7. In July, a donor established a trust in the amount of $6,000,000. Income from the trust is to be paid to the hospital until the donor's death, with no restrictions on use. At that time, the principal is to be given to a local university. A local bank is appointed as trustee. Income received by the trust, and due to be distributed in 2020, amounted to $100,000. As of December 31, the bank had remitted only $60,000 to the hospital.
8. A donor's will provided for a bequest to the hospital of debt securities. There are no restrictions on the securities or income and gains and losses on the securities. The hospital decided to hold the securities on a long-term basis and received interest income of $65,000 in 2020. When the donor died on March 15, the securities were worth $1,500,000; at year-end they were worth $1,270,000.
9. A new X-ray machine was purchased for $4,000,000, using unrestricted cash.
Required - Prepare Montclair Hospital's 2020 statement of activities, in good form. Ignore beginning and ending net asset balances.