The following events were recorded on the books of Mercy Hospital for the year ended December 31, 2008

CH19 - Problem 1 -- Statement of Activities—Hospital

The following events were recorded on the books of Mercy Hospital for the year ended December 31, 2008.


1. Revenue from patient services totaled $16,000,000. The allowance for uncollectibles was established at $3,400,000. Of the $16,000,000 revenue, $6,000,000 was recognized under cost reimbursement agreements. This revenue is subject to audit and retroactive adjustment by third-party payers (estimated adjustments are included in the allowance account).

2. Patient service revenue is accounted for at established rates on the accrual basis.

3. Other operating revenue totaled $346,000, of which $160,000 was from specific purpose funds.

4. Mercy received $410,000 in unrestricted gifts and bequests. They are recorded at fair market value when received.

5. Endowment funds earned $160,000 in unrestricted income.

6. Board designated funds earned $82,000 in income.

7. Mercy’s operating expenses for the year amounted to $13,370,000. This included $500,000 in straight-line depreciation.

Prepare a statement of activities for Mercy Hospital for the year ended December 31, 2008.

Click here for the solution: The following events were recorded on the books of Mercy Hospital for the year ended December 31, 2008

Presented here are several transactions and events of the General Fund of Johnson County

3–10. Presented here are several transactions and events of the General Fund of Johnson County. All transactions and events relate to calendar year 2009.

1. Estimated revenues from the following sources were legally budgeted.
Sales taxes $ 6,000,000
Fines and forfeits 2,000,000
Licenses and permits 1,750,000
Intergovernmental revenues 350,000
Total $10,100,000

2. Appropriations for the following functions were legally budgeted .
General government $2,100,000
Public safety 3,890,000
Culture and recreation 700,000
Health and welfare 3,000,000
Total $9,690,000

3. During the year, revenues were received in cash from the following sources:
Sales taxes $ 5,930,000
Fines and forfeits 1,990,000
Licenses and permits 1,740,000
Intergovernmental revenues 385,000
Total $10,045,000

4. During the year, contracts and purchase orders were issued as follows:
General government $ 450,000
Public safety 800,000
Culture and recreation 280,000
Health and welfare 500,000
Total $2,030,000

5. Goods and services (these are a portion of the total ordered in transaction 4) were received, as follows:
Estimated Actual
General government $ 450,000 $ 452,000
Public safety 500,000 510,000
Culture and recreation 275,000 276,000
Health and welfare 500,000 500,000
Total $1,725,000 $1,738,000

6. A budget revision was approved by the County Commission. Estimated revenues for intergovernmental revenues were increased by $35,000. Appropriations for general government were increased by $100,000.

7. Vouchers were issued for items not previously encumbered, primarily personal services, in the following amounts:
General government $1,747,000
Public safety 3,080,000
Culture and recreation 418,000
Health and welfare 2,500,000
Total $7,745,000

a. Record the transactions in general journal form. Include subsidiary accounts as illustrated in this chapter.
b. Open budgetary, revenue, expenditure, and encumbrance general ledger control accounts and post the transactions. You may use T-accounts.
c. Open Revenue and Appropriations, Expenditures, and Encumbrances subsidiary ledgers. Post the transactions. Prove that the control account balances agree with the related subsidiary ledger accounts.
d. Assume a beginning Fund Balance—Unreserved of $150,000. Prepare a budgetary comparison schedule for the General Fund. Include encumbrances with expenditures. Use Illustration 3–4 as an example.
e. Assuming that encumbered appropriations do not lapse at the end of the budget year, how much of the 2009 appropriations, by function, did lapse at the end of 2009? Show computations in good form.


Click here for the solution: Presented here are several transactions and events of the General Fund of Johnson County

Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012

3-12 Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012.

1. Estimated revenues (legally budgeted)
Property taxes $5,000,000
Sales taxes 4,000,000
Licenses and permits 1,500,000
Miscellaneous 500,000

2. Appropriations
General government 5,000,000
Culture and recreation 4,500,000
Health and welfare 1,000,000

3. Revenues received (cash)
Property taxes $4,783,541
Sales taxes 4,501,009
Licenses and permits 1,700,000
Miscellaneous 800,000

4. Encumbrances issued (includes salaries and other recurring items)
Estimated
General government 5,100,000
Culture and recreation 4,650,000
Health and welfare 905,000

5. Goods and services received (paid in cash)
Estimated Actual
General government 5,100,000 $5,035,450
Culture and recreation 4,650,000 4,610,000
Health and welfare 905,000 891,550

6. Budget revisions
Increase appropriations:
General government $100,000
Culture and recreation 150,000

7. Fund balance-Unrestricted on January 1 , 2012, was $735,000. There were no outstanding encumbrances at that date.

A. Record the transactions using the appropriate journal entries.
B. Prepare a budgetary comparison schedule for the General Fund.


Click here for the solution: Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012

During 2010, Jester Corporation had the following transactions and events

E14-6 During 2010, Jester Corporation had the following transactions and events.

1.Declared a cash dividend.
2.Issued par value common stock for cash at par value.
3.Completed a 2-for-1 stock split in which $10 par value stock was changed to $5 par value stock.
4.Declared a small stock dividend when the market value was higher than par value.
5.Made a prior period adjustment for overstatement of net income.
6.Issued the shares of common stock required by the stock dividend declaration in item no. 4 above.
7.Paid the cash dividend in item no. 1 above.
8.Issued par value common stock for cash above par value.

Instructions
Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answer in tabular form with the following columns (Capital Stock, Additional, Retained earnings). Use (I) for increase, (D) for decrease, and (NE) for no effect. Item no. 1 is given as an example.

1. Capital Stock = NE, Additional = NE, Retained earnings = D.


Click here for the solution: During 2010, Jester Corporation had the following transactions and events

Manning Co. manufactures and sells trophies for winners of athletic and other events

Manning Co. manufactures and sells trophies for winners of athletic and other events. Its manufacturing plant has the capacity to produce 18,000 trophies each month; current monthly production is 15,300 trophies. The company normally charges $141 per trophy. Cost data for the current level of production are shown below:

Direct materials 948,600
Direct Labor 290,700
Selling and administrative 41,310
Fixed Cost manufacturing 579,870
Selling administrative 134,640

The company has just received a special one-time order for 900 trophies at $73 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs. Required: Should the company accept this special order? Why?


Click here for the solution: Manning Co. manufactures and sells trophies for winners of athletic and other events

For each of the following subsequent (post-balance-sheet) events, indicate whether a company should

E24-2 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

______ 1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
______ 2. Introduction of a new product line.
______ 3. Loss of assembly plant due to fire.
______ 4. Sale of a significant portion of the company’s assets.
______ 5. Retirement of the company president.
______ 6. Issuance of a significant number of shares of common stock.
______ 7. Loss of a significant customer.
______ 8. Prolonged employee strike.
______ 9. Material loss on a year-end receivable because of a customer’s bankruptcy.
______ 10. Hiring of a new president.
______ 11. Settlement of prior year’s litigation against the company.
______ 12. Merger with another company of comparable size.

Click here for the solution: For each of the following subsequent (post-balance-sheet) events, indicate whether a company should

Biello Co. manufactures and sells medals for winners of athletic and other events

Biello Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 14,250 medals. The company normally charges $115 per medal. Cost data for the current level of production are shown below.

Variable Costs
Direct Materials $969,000
Direct Labor $270,750
Selling and Administrative $270,075
Fixed Costs
Manufacturing $370,550
Selling and Administrative $89,775

The company has just received a special one-time order for 600 medals at $102 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.

Required:
Should the company accept this special order? Why?

Click here for the solution: Biello Co. manufactures and sells medals for winners of athletic and other events

ACC 421 Week 4 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should

ACC 421 Week 4

Exercise 24-2 (E24-2) (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

______ 1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
______ 2. Introduction of a new product line.
______ 3. Loss of assembly plant due to fire.
______ 4. Sale of a significant portion of the company’s assets.
______ 5. Retirement of the company president.
______ 6. Prolonged employee strike.
______ 7. Loss of a significant customer.
______ 8. Issuance of a significant number of shares of common stock.
______ 9. Material loss on a year-end receivable because of a customer’s bankruptcy.
______ 10. Hiring of a new president.
______ 11. Settlement of prior year’s litigation against the company.
______ 12. Merger with another company of comparable size.

Click here for the solution: ACC 421 Week 4 (Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should