CHAPTER 22 Multiple Choice

22-1: 22-2: b. d. The total tuition fees for educational and general purposes. 22-3: 22-4: d. (P1,240,000 P160,000) a. nrestricted cash contri!ution recei"ed fro# donors are to !e reported as increase in net cash pro"ided !$ operation. 22-5: d. The re#aining contri!ution of P5,000 on %ece#!er 31, 2004. 22-6: b. nregistered pledges fro# donors are treated as re"enues at the ti#e of the pledge. 22-7: d. Patient re"enues &ursing ser"ices Professional ser"ices Total re"enues 'ess( )taff discounts *llo+ances Third part$ pa$ors Net revenues P 5,000,000 1,000,000 500,000 P 6,500,000 P50,000 230,000 ,00,000 1,0,0,000 P 5,420,000 (P500,000 P300,000)

-ad de!ts are treated in the usual #anner as e.pense. 22- : a. *s of /ul$ 31, 2004, all of the funds are properl$ includi!le in the Plan 0unds, for a total of P100,000. 22-!: c. (P,00,000 P110,000)

22-1": d. Patient re"enues (net of charit$ care) 'ess( contractual ad2ust#ents Net patient service revenues 22-11: c. P 600,000 200,000 P 400,000

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22-12: c. The contri!uted ser"ices are de!ited to )alar$ 3.pense account and credited to 4ontri!ution 5e"enue account. 22-13: c. The net effect on unrestricted net assets of spending P10,000 on research is 6ero. 22-14: b. (P5,000,000 7 P50,000) The P1,000,000 contri!ution fro# the donor, +ho stipulated that the contri!ution !e in"ested 8ndefinitel$, should !e reported as per#anentl$ restricted re"enue. 22-15: c. 22-16: b. -oth are treated as a financing acti"it$ on the state#ent of cash flo+s. 22-17: a. 4ash flo+s fro# operating acti"ities +ould include !oth the cash recei"ed fro# patient ser"ice 5e"enue of P300,000 and the cash recei"ed fro# gift shop sales of P25,000. 22-1 : b. 4ash recei"ed fro# patient re"enue (collection of recei"a!les) and fro# tuition re"enue are !oth included in the a#ount reported for cash flo+s fro# operating acti"ities. The other cash receipts +ould !e reported as increases in cash flo+s pro"ided !$ financing acti"ities. 22-1!: b. 3.pirations of donor restrictions on te#poraril$ restricted net assets should !e reported on the )tate#ent of operations as net assets released fro# restrictions. 22-2": c. 4urrent funds re"enues include (1) all unrestricted gifts and other unrestricted resources earned during the reporting period, and (2) restricted current funds to the e.tent that such funds +ere e.pended for current operating purpose. Therefore, the a#ount that should !e included in current funds re"enue is( nrestricted gifts recei"ed( 3.pended &ot e.pended 5estricted gifts recei"ed 3.pended Total P600,000 95,000 100,000 P775,000

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P#oble$%
P#oble$ 22-1 1. Pledges recei"a!le *llo+ance for uncollecti!le pledges 4ontri!ution re"enue 4ash Pledges recei"a!le 3. 4ash 0und raising e.pense 0und raising re"enue 8n"est#ent 4ash 4ash )ales pu!lic re"enue 6. )alaries 3#plo$ee fringe !enefits Pa$roll ta.es )upplies Telephone tilities 5ent 4onference, con"entions and #eetings 4ost of sales to pu!lic :iscellaneous 4ash tilities )alaries *ccounts pa$a!le or accrued e.pense pa$a!le ,. 0und -alance ; nrestricted 0und !alance 5estricted to purchases of ne+ e<uip#ent. 10,000 10,000 10,000 15,000 16,000 9,000 1,500 6,000 10,000 5,000 1,000 3,000 154,500 1,000 5,000 6,000 40,000 5,000 45,000 35,000 35,000 5,000 5,000 300,000 10,000 290,000 260,000 260,000

2.

4. 5.

9.

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P#oble$ 22-2 (1) *ccounts recei"a!le Patient ser"ice re"enues To record gross patient ser"ice re"enue for the #onth at full rates. *ccounts recei"a!le Patient ser"ice re"enues To record recei"a!le fro# )ocial :edicare. 4ontractual ad2ust#ents *ccounts recei"a!le To record contractual ad2ust#ents allo+ed. %ou!tful accounts *llo+ance for dou!tful accounts To pro"ide allo+ances for dou!tful accounts. (2) )alaries e.pense 4ontri!ution re"enues To record donated ser"ices (10,000 200). Pledges recei"a!le 4ontri!ution re"enues To record pledges recei"ed fro# donors. 4ash Pledges recei"a!le To record pledges collected. Pro"isions for dou!tful pledges *llo+ance for dou!tful pledges To pro"ide dou!tful pledges. (4) 4ash 0und !alance To record receipt of cash fro# restricted fund. Plant assets 4ash To record ac<uisition of ne+ surgical e<uip#ent. 3,000 3,000 ,00 ,00 3,000 3,000 ,0,000 ,0,000

2,500 2,500 6,000 6,000 ,,000 ,,000 1,,00 1,,00 5,000 5,000 3,500 3,500

(3)

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P#oble$ 22-3 Plant Fund Ledger Account: (1) 3<ui"alent 0und -alance To record ac<uisitions of co#puters fro# unrestricted fund. (2) -uildings 4ash :ortgage notes pa$a!le To record construction of ne+ !uilding financed in part !$ 5= #ortgage note pa$a!le. 2,000,000 250,000 1,950,000 50,000 50,000

Quasi- ndo!"ent Fund Ledger Account: (3) 4ash 8n"est#ents Pa$a!le to nrestricted fund To record sale of in"est#ents at a gain, the use of +hich is unrestricted. 110,000 100,000 10,000

#nrestricted Fund Ledger Account: (1) ndesignated fund !alance 4ash To record ac<uisitions of co#puters to !e carried in Plant 0und. 4ash 4ontri!ution re"enues To record receipt of unrestricted gift. (3) 5ecei"a!le fro# <uasi;endo+#ent fund 8n"est#ent inco#e To record in"est#ent gain recei"a!le. 10,000 10,000 50,000 50,000

(2)

2,000,000 2,000,000

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P#oble$ 22-4 Nonpro$it Trade Association %tate"ent o$ Activities &ear nded 'une (0, 2004 5e"enues and >ains( :e#!ership dues 4onferences and #eetings Pu!lications and ad"ertising sales )pecial assess#ents 8n"est#ent inco#e, including net gains Total 3.penses( :e#!er ser"ices 4onferences and #eetings Technical ser"ices 4o##unications >eneral ad#inistration :e#!ership de"elop#ent 8ncrease in unrestricted net assets &et assets, !eginning of $ear &et assets, end of $ear P1,4,000 321,000 143,000 50,000 11,000 P901,000 P 56,000 166,000 21,,000 61,000 154,000 29,000

6,2,000 29,000 2,5,000 P312,000

Nonpro$it Trade Association %tate"ent o$ Financial Position 'une (0, 2004 ASSETS 4urrent assets 4ash P 9,000 )hort;ter# in"est#ents *ccounts recei"a!le (net) Pu!lications in"entor$ Total current assets 'ong;ter# in"est#ents Plant assets (net) ?ther assets Total assets LIABILITIES AND NET ASSETS 4urrent lia!ilities *ccounts pa$a!le and accrued lia!ilities %eferred #e#!ership dues Total current lia!ilities &et assets (unrestricted) Total lia!ilities and net assets 219,000 25,000 61,000 310,000 120,000 33,000 2,,000 P411,000

P 4,,000 131,000 191,000 312,000 P411,000

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P#oble$ 22-5 )*ildren Association %tate"ent o$ Activities &ear nded +ece",er (-, 2004 Changes in unrestricted net assets: 5e"enues and gains( 4ontri!utions :e#!ership dues Progra# ser"ice fees 8n"est#ent inco#e Total unrestricted re"enues and gains 3.penses( Progra#s :anage#ent and general e.penses 0und raising 8ncrease in unrestricted net assets Changes in temporarily restricted net assets: 4ontri!utions 3.penses( :anage#ent and general e.penses 0und raising e.penses 8ncrease in te#poraril$ restricted net assets 8ncrease in net assets &et assets, !eginning of $ear (P12,000 7 P26,000 7 P3,000) &et assets, end of $ear

P320,000 25,000 30,000 10,000 P3,5,000 P290,000 49,000 ,,000

325,000 P 60,000 P 15,000

P 4,000 1,000

5,000 P 10,000 P 90,000 41,000 P111,000

)*ildren Association %tate"ent o$ Financial Position +ece",er (-, 2004 ASSETS 4ash (P40,000 7 P1,000) -e<uest and interest recei"a!le (P5,000 7 P1,000) Pledges recei"a!le (net) (P12,000 P3,000) 8n"est#ents, at cost Total assets LIABILITIES AND NET ASSETS 'ia!ilities *ccounts pa$a!le and accrued lia!ilities (P50,000 7 P1,000) %eferred re"enues Total lia!ilities &et assets( nrestricted (P3,,000 7 P60,000) Te#poraril$ restricted (P3,000 7 P10,000) Total net assets Total lia!ilities and net assets P 40,000 6,000 1,000 100,000 P164,000 P 51,000 2,000 P 53,000 P 1,,000 13,000 P111,000 P164,000

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P#oble$ 22-6 %an Pedro .ospital %tate"ent o$ Financial Position 'une (0, 2004 A&&ET& Current assets 4ash *ccounts recei"a!le (net of allo+ance of P5,000) 8n"entories Prepaid e.penses Total current assets Investments Property plant and e!uipment (net of accu#ulated depreciation of P140,000) Total assets '(A)('(T(E& A*+ *ET A&&ET& '(A)('(T(E& Current lia"ilities: *ccounts pa$a!le *ccrued e.penses %eferred re"enues 4urrent portion of long;ter# de!t Total current lia!ilities #ortgage paya"le Total lia!ilities *ET A&&ET& $nrestricted Temporarily restricted Permanently restricted Total net assets Total lia!ilities and net assets

P 222,000 20,000 50,000 10,000 P 302,000 660,000 160,000 P1,122,000

45,000 19,000 11,000 24,000 P 19,000 125,000 P 222,000 P 14,,000 232,000 520,000 P 100,000 P1,122,000

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