Identify the best answer for each of the following 1

Identify the best answer for each of the following:1. On July 1, 20X5, Lilydale Hospital’s board
of trustees designated $200,000 for expansion of outpatient facilities. The $200,000 is expected
to be expended in the fiscal year ending June 30, 20X8. In Lilydale’s statement of net position
at June 30, 20X6, this cash should be classified asa. Assets limited as to use.b. A restricted
noncurrent asset.c. An unrestricted current asset.d. An unrestricted noncurrent asset.2. During
the year ended December 31, 20X5, Melford Hospital received the following donations stated at
their respective fair values:Employee services from members of a religious group . . . . . . . .$
100,000Medical supplies from an association of physicians . . . . . . . . . . 30,000These supplies
were restricted for indigent care and were used for such purpose in 20X5. How much revenue
or gain from donations should Melford report in its 20X5 Statement of Revenues, Expenses,
and Changes in Net Position?a. $0b. $30,000c. $100,000d. $130,0003. Glenmore County
Hospital’s property, plant, and equipment (net of accumulated depreciation) consists of the
following:Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000Buildings . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 10,000,000Equipment (purchased from restricted resources) . . . . . . .
2,000,000What portion of these assets should be reflected in restricted net position?a. $0b.
$2,000,000c. $10,500,000d. $12,500,0004. Which of the following would normally be included
in other operating revenues of a government hospital?a. Unrestricted interest income from an
endowmentb. An unrestricted giftc. Donated servicesd. Both items b and cQuestions 5 and 6
are based on the following data:Under Abbey Hospital’s established rate structure, the hospital
would have earned patient service revenue of $6 million for the year ended December 31,
20X5. However, Abbey did not expect to collect this amount because of charity allowances of
$1 million and discounts of $500,000 to third-party payers. In May 20X5, Abbey purchased
bandages from Lee Supply Co. at a cost of $1,000. However, Lee notified Abbey that the
invoice was being canceled and that the bandages were being donated to Abbey.5. For the year
ended December 31, 20X5, how much should Abbey report as patient service revenue in its
Statement of Revenues, Expenses, and Changes in Net Position?a. $6,000,000b. $5,500,000c.
$5,000,000d. $4,500,0006. For the year ended December 31, 20X5, Abbey should report the
donation of bandages asa. A $1,000 reduction in operating expenses.b. Nonoperating gain of
$1,000.c. Other operating revenue of $1,000.d. A memorandum entry only.7. A government
hospital is required to present all of the following financial statements excepta. A Statement of
Net Position.b. A Statement of Cash Flows.c. A Budgetary Operating Statement.d. A Statement
of Revenues, Expenses, and Changes in Net Position.8. GAAP for nongovernment not-for-profit
hospitals are primarily established by thea. GASB.b. FASB.c. AICPA.d. American Hospital
Association.9. Equity classifications for nongovernment not-for-profit hospitals include all of the
following excepta. Net investment in capital assets.b. Unrestricted net assets.c. Permanently
restricted net assets.d. Temporarily restricted net assets.10. Which of the following statements
about a nongovernment not-for-profit hospital Statement of Cash Flows is false?a. A
nongovernment not-for-profit hospital Statement of Cash Flows classifies the acquisition of
property as an investing activity.b. The Statement of Cash Flows for a nongovernment not-for-
profit hospital reports only three cash flow classifications.c. FASB cash flow statement guidance
is optional for nongovernment not-for-profit hospitals.d. The Statement of Cash Flows includes a
reconciliation of the change in net position to cash provided by operating activities.View
Solution: Identify the best answer for each of the following 1

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