Central Clinic, Inc. is a 501(c)(3) corporation whose mission is to provide low cost health care to qualified individuals. Ostensibly, qualified individuals are those not eligible for Medicare or Medicaid but without other adequate health insurance. In reality, Central Clinic turns away no one in need of health care and, when appropriate, Medicare, Medicaid, or health insurance companies/exchanges are billed for the health care services provided.
Central Clinic was started in a rundown storefront fifteen years ago by a group of young, committed physicians. It has developed an excellent reputation among the medical community for providing quality health care at little or no cost. To further Central Clinic’s good work, a large number of physicians as well as area hospitals contribute their time, talent, and treasure to Central Clinic. As a result, contributions make up over 50 percent of the clinic’s financial resources. Contributions consist of volunteer medical services, cash contributions, and donated equipment and supplies.
You are the recently hired accounting manager for Central Clinic and are in charge of reviewing the general ledger accounts and making adjustments as needed under generally accepted accounting principles. Remembering the working trial balance concept from ACG 2021 and ACG 3131, you download the general ledger accounts into Excel and format them into a working trial balance.
After review of the unadjusted balances and detailed analyses of selected accounts, you note a number of items you believe require further analysis. To make sure you remember the difference in adjusting and reclassifying entries, you search Wikipedia for clarification. As you thought, you find adjusting entries affect accounts on different statements and reclassifying entries affect the same type of accounts on the same statement. You also recall GAAP require the statement of activities to present the change in each class of net assets; therefore, you conclude changes affecting different classes of net assets will need to be recorded as adjusting entries rather than reclassifying entries.
Before starting your analysis, you remember Dr. Dennis’s exams from ACG 3501 where she sometimes provided information not relevant to the question. Therefore, you decide to keep an open mind during your analyses and will not assume all the items you noted will require adjustments or reclassifications.
1 Patient fees include $2,000 a patient paid on December 15 as a down payment on in-office surgical procedures which will be performed in early January.
In December, you sent letters to all of the doctors and nurses who volunteered at the Clinic during the year. Based on the letters received to date, you determined the following:
According to the local chapter of the American Medical Association, general physicians in the area charge an average of $500 per hour when providing general patient diagnostic services.
The Clinic pays its full time Registered Nurses $35 per hour.
Ten general physicians each volunteered a total of 24 hours per month every month of the year. They spent all of their time seeing patients.
Two Registered Nurses each volunteered a total of 16 hours each month of the year. All of their time was spent seeing patients and assisting the general physicians.
Two neurologists each volunteered a total of 12 hours per month every month of the year. They spent all of their time seeing patients and performing general physician level patient care. The doctors indicated they normally charge $1,100 per hour when providing neurological consults.
what is the journal entry for this for government anf non profit class.
1. Patient fees A/C Dr. $ 2000
To Advance Receipt A/C $ 2000
2. 10 general physicians pay : 10*500*24*12 = 14,40,000
2 registered nurses = 2*16*12*35= 13440
2 neurologists =2*12*12*1100= 316800
entry Salary A/C dr. 17,70,240
To Bank A/C 17,70,240