Central Clinic, Inc. is a 501(c)(3) corporation whose mission is to provide low cost health care to qualified individuals. Prepare the adjustments to the accounts as necessary based on these transactions. Indicate whether each transaction is an adjustment or a reclassification. Indicate if (any) no entries are required.
1) A month after you began your job at Central Clinic, you learned the percentages used to allocate salaries and benefits to functions were last revised 10 years ago. Therefore, you studied time records and talked to employees to determine how employees spent their time. Based on these percentages, you determine the following breakdown for salaries and benefits.
Patient Care $ 600,000
Pharmacy 150,000
Administration 350,000
Executive 300,000
Fund Raising 200,000
2) Occupancy and related costs are charged to functions based on the relative square footage used for each program/function. Building space is utilized as follows:
Exam and waiting rooms 3,500 square feet
Offices for doctors and nurses 2,000 square feet
Pharmacy 500 square feet
Administration 1,500 square feet
Executive 500 square feet
Fund Raising 500 square feet
| Unadjusted Balance |
| Debit |
Credit |
| Cash |
200,000 |
| Pledges Receivable - Unrestricted |
50,000 |
| Pledges Receivable - Temporarily Restricted |
375,000 |
| Estimated Uncollectible Pledges |
50,000 |
| Inventory |
40,000 |
| Investments |
275,000 |
| Buildings |
5,000,000 |
| Furniture and Equipment |
2,000,000 |
| Accumulated Depreciation |
2,500,000 |
| Accounts Payable |
45,000 |
| Accrued Expenses |
125,000 |
| Current Portion Mortgage Payable |
120,000 |
| Long-term Portion Mortgage Payable |
3,200,000 |
| Unrestricted Net Assets |
1,565,000 |
| Temporarily Restricted Net Assets |
300,000 |
| Contributions - Unrestricted |
600,000 |
| Contributions - Temporarily Restricted |
720,000 |
| Fees for Services - Medicare |
700,000 |
| Fees for Services - Medicaid |
1,100,000 |
| Fees for Services - Insurance |
250,000 |
| Fees for Services - Patients |
95,000 |
| Pharmacy Sales |
45,000 |
| Investment Income - Unrestricted |
10,000 |
| Net Assets Released from Restrictions |
| Temporarily Restricted |
250,000 |
| Unrestricted |
250,000 |
| Cost of Pharmacy Sales |
20,000 |
| Salaries and Fringe Benefits |
1,600,000 |
| Occupancy and Utility Expense |
175,000 |
| Mortgage Interest |
1,200,000 |
| Medical Supplies Expense |
125,000 |
| Printing and Publishing Expense |
20,000 |
| Contract Services |
40,000 |
| Equipment Rental Expense |
60,000 |
| Depreciation Expense |
245,000 |
| Totals |
11,675,000 |
11,675,000
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