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St. Joseph's Hospital began operations in December 2023 with patient service revenues totaling $1,110,000 (based on customary rates) for the month. Of this, $200,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third-party payors, including insurance companies and government health care agencies. St. Joseph's estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital's fiscal year ends on December 31. Required: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $112,000 is collected from the patients during the year, and $10,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $190,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet < A B C D E F Record the year end allowance for contractual adjustments for 2024. Note: Enter debits before credits. Transaction General Journal 2b1 Contractual Adjustments Debit Credit 136,500 Allowance for Contractual Adjustments 190,000 ✓

St. Joseph's Hospital began operations in December 2023 with patient service revenues totaling $1,110,000 (based on customary rates) for the month. Of this, $200,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third-party payors, including insurance companies and government health care agencies. St. Joseph's estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital's fiscal year ends on December 31. Required: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $112,000 is collected from the patients during the year, and $10,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $190,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet < A B C D E F Record the year end allowance for contractual adjustments for 2024. Note: Enter debits before credits. Transaction General Journal 2b1 Contractual Adjustments Debit Credit 136,500 Allowance for Contractual Adjustments 190,000 ✓

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
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St. Joseph's Hospital began operations in December 2023 with patient service revenues totaling $1,110,000 (based on customary rates) for the month. Of this, $200,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third-party payors, including insurance companies and government health care agencies. St. Joseph's estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital's fiscal year ends on December 31. Required: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $112,000 is collected from the patients during the year, and $10,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $190,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet < A B C D E F Record the year end allowance for contractual adjustments for 2024. Note: Enter debits before credits. Transaction General Journal 2b1 Contractual Adjustments Debit Credit 136,500 Allowance for Contractual Adjustments 190,000 ✓
Transcribed Image Text:St. Joseph's Hospital began operations in December 2023 with patient service revenues totaling $1,110,000 (based on customary rates) for the month. Of this, $200,000 is billed to patients, representing their insurance deductibles and copayments. The balance is billed to third-party payors, including insurance companies and government health care agencies. St. Joseph's estimates that 20 percent of these third-party payor charges will be deducted by contractual adjustment. The hospital's fiscal year ends on December 31. Required: 1. Prepare the journal entries for December 2023. Assume 15 percent of the amounts billed to patients will be reduced through implicit price adjustments. 2. Prepare the journal entries for 2024 assuming the following: a. $112,000 is collected from the patients during the year, and $10,700 of price adjustments are granted to individuals. b. Actual contractual adjustments total $190,000. The remaining receivable from third-party payors is collected. Note: For all requirements, if no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet < A B C D E F Record the year end allowance for contractual adjustments for 2024. Note: Enter debits before credits. Transaction General Journal 2b1 Contractual Adjustments Debit Credit 136,500 Allowance for Contractual Adjustments 190,000 ✓
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