Problem
Statement of Activities-Hospital
The following events were recorded on the books of Mercy Hospitalfor the year ended December 31, 2012.
1. Revenue from patient services totaled $16,000,000. The allowancefor uncollectibles was established at $3,400,000. Of the $16,000,000 revenue, $6,000,000was recognized under cost reimbursement agreements. This revenue is subject to audit andretroactive adjustment by third-party payers (estimated adjustments areincluded in the allowance account).
2. Patient service revenue is accounted for at established rates onthe accrual basis.
3. Other operating revenue totaled $346,000, of which $160,000 wasfrom specific purpose funds.
4. Mercy received $410,000 in unrestricted gifts and bequests. Theyare 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.
Required:
Prepare a statement of activities for Mercy Hospital for the yearended December 31, 2012.