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The Edwards Lake Community Hospital balance sheet as of December 31, 2019, follows.

EDWARDS LAKE COMMUNITY HOSPITAL
Balance Sheet
As of December 31, 2019
Assets
Current assets:
Cash and Cash Equivalents						$	365,700
Accounts and notes receivable (net of uncollectible accounts of $16,600)							27,300
Inventory							83,800
Total current assets							476,800
Assets limited as to use:
Cash		$	17,940
Investments			233,220
Total assets limited as to use							251,160
Property, plant, and equipment:
Land			214,100
Buildings (net of accumulated depreciation of $1,623,800)			2,897,000
Equipment (net of accumulated depreciation of $1,025,300)			1,860,400
Total property, plant, and equipment							4,971,500
Total assets						$	5,699,460
Liabilities and Net Assets
Current liabilities:
Accounts payable						$	20,000
Accrued payroll							46,600
Current portion of mortgage payable							540,000
Total current liabilities							606,600
Long-term debtmortgage payable							2,580,000
Total liabilities							3,186,600
Net assets:
Without donor restrictions
Undesignated			2,086,760
Designated for plant			250,360
With donor restrictions			175,740				2,512,860
Total liabilities and net assets						$	5,699,460

The following are the transactions of Edwards Lake Community Hospital during the fiscal year ended December 31, 2020.

(1) Information related to accrual of revenues and gains is as follows:

Patient services revenue, gross	$	3,501,700
Charity care		215,260
Contractual adjustments to patient service revenues		1,528,000
Other operating revenues		1,000,350

(2) Cash received includes

Interest on investments in Assets Limited as to Use		8,150
Collections of receivables		2,964,600

(3) Expenses of $895,000 were recorded in accounts payable and $1,459,190 in accrued payroll. Because some of the nursing expenses met a net asset restriction, $98,000 was released from restrictions.

Administration expenses		450,480
General services expenses		526,360
Nursing services expenses		1,032,600
Other professional services expenses		344,750

(4) Cash paid includes:

Interest expense (allocated half to nursing services and half to general services)	$	288,000
Payment on mortgage principal		540,000
Accounts payable for purchases		838,400
Accrued payroll		1,283,500

(5) Interest of $1,580 accrued on investments in Assets Limited as to Use. (6) Depreciation charges for the year amounted to $121,000 for the buildings and $132,500 for equipment. Depreciation was allocated 45 percent to nursing services, 15 percent to other professional services and 20 percent to each administrative and general services. (7) Other information: (a) Provision for uncollectible receivables was determined to be adequate. (b) Supplies inventory balances:

	12/31/2019		12/31/2020
Administration		$	10,400				$	8,900
General services			11,100					13,000
Nursing services			21,000					18,400
Other professional services			41,300					48,000
Totals		$	83,800				$	88,300

(c) Portion of mortgage payable due within one year, $540,000.

(8) A $679 unrealized loss on investments occurred. (9) Nominal accounts were closed. Necessary adjustments were made to increase the Net AssetsWithout Donor Restrictions, Designated for Plant.

1. Required

a-1.Prepare journal entry for the preceding transactions during the fiscal year ended December 31, 2020, assuming that Edwards Lake Community Hospital is a not-for-profit hospital.

1. a-2.Prepare closing entries for the fiscal year ended December 31, 2020, assuming that Edwards Lake Community Hospital is a not-for-profit hospital.
2. b.Prepare a balance sheet as of December 31, 2020.
3. c-1.Prepare a statement of operations for the year ended December 31, 2020.
4. c-2.Prepare a statement of changes in net assets for the year ended December 31, 2020.
5. d.Prepare a statement of cash flows for the year ended December 31, 2020.

No	Transaction	General Journal	Debit	Credit
A	01	Accounts and Notes Receivable
		Contractual Adjustments	1,528,000
		Patient Service Revenue		3,501,700
		Other Operating Revenues		1,000,350
B	02	Cash	2,964,600
		Assets Limited as to UseCash	8,150
		Accounts and Notes Receivable		2,964,600
		Investment IncomeWithout Donor Restrictions		8,150
C	3(a)	Administrative Expenses	450,480
		General Service Expenses	526,360
		Nursing Services Expenses	1,032,600
		Other Professional Services Expenses	344,750
		Accounts Payable		895,000
		Accrued Payroll		1,459,190
D	3(b)	Net AssetsReleased from RestrictionsWith Donor Restrictions	98,000
		Net AssetsReleased from RestrictionsWithout Donor Restrictions		98,000
E	04	Nursing Services Expenses
		General Service Expenses
		Mortage Payable	540,000
		Accounts Payable	838,400
		Accrued Payroll	1,283,500
		Cash
F	05	Assets Limited as to UseInterest Receivable	1,580
		Investment IncomeWithout Donor Restrictions		1,580
G	06	Administrative Expenses
		General Service Expenses
		Nursing Services Expenses
		Other Professional Services Expenses
		Accumulated DepreciationBuildings		121,000
		Accumulated DepreciationEquipment		132,500
H	7(a)	No Journal Entry Required
I	7(b)	Inventory	4,500
		Administrative Expenses	1,500
		Nursing Services Expenses	2,600
		Other Professional Services Expenses		6,700
		General Service Expenses		1,900
J	08	Unrealized Loss on Investments	679
		Assets Limited as to UseInvestments		679

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