BM2016

TASK PERFORMANCE (72 points: 24 items x 3 points)

Direction: Read the problem and give what is being asked. Write your answers on another sheet of paper.

1. Santa Maria Hospital is a non-profit organization located in Bulacan. Given below are the transactions and
events of its General Fund for October 20X1:

• Gross patient service revenues of P80,000 were billed to patients. Indigent charity care amounted to
P4,000, of which P2,500 was a receivable from Social Medicare of P6,000 and doubtful accounts of
P8,000.
• Contributed services approximating P10,000 at going salary rates were received from volunteer nurses.
Meals costing P200 were served to the volunteer nurses at no charge by the Santa Maria Hospital
cafeteria.
• New unrestricted pledges due in three (3) months, totaling P5,000, were received from various donors.
Collections on pledges amounted to P3,500, and the provision for doubtful pledges for the month was
P800.
• The amount of P3,000 received from the Restricted Fund was expended for new surgical equipment,
as authorized by the donor.

Required: Prepare the journal entries for the transactions of Santa Maria Hospital for October.

Accounts Receivable P76,000

Patient Service Revenue P76,000
To record gross patient service revenue exclusive of charity care

Contractual Adjustment 6,000

Accounts Receivable 6,000
To record contractual adjustment allowed

Doubtful Account 8,000

Allowance for Doubtful Account 8,000
To record provision for doubtful accounts

Salaries Expense 10,000

Contribution revenue 10,000
To record donated service

Pledge Receivable 5,000

Contribution Revenue 5,000
To record receivables from pledges

Cash 3,500
Pledge Receivable 3,500
To record pledges collected

Doubtful Pledge Expense 800

Allowance for doubtful pledges 800
To provide doubtful pledges
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Restricted Funds
Cash 3,000
Contribution revenue -Temporarily restricted 3,000
To record donation received for the acquisition of equipment

Net Assets released from restrictions 3,000

Cash 3,000
To record funds released from temporarily restriction

Unrestricted Funds
Property and Equipment 3,000
Cash 3,000
To record purchase of equipment

Cash 3,000
Net Assets released from restrictions 3,000
To record transfer of temporarily restricted funds

2. The following events occurred to the Cancer Research Foundation during the fiscal year ended June 30,
20X1:

• Unrestricted pledges for P300,000 were received. It is estimated that 10% will not be collectible.
• P260,000 was collected on pledges. It is estimated that another P10,000 will be collected next year.
• Received P40,000 from Manila Bulletin. The amount was net of P5,000 for fund-raising expenses.
• Invested P35,000 in certificates of deposit. During the year, it collected P2,000 interest. At year-end,
the accrued interest amounted to P1,000.
• Collected P5,000 in cash from sales of its booklet “How to Cope with Cancer.”
• Expenses paid in cash during the year were as follows:

Salaries P90,000
Employee Fringe Benefits 15,000
Payroll Taxes 16,000
Supplies 7,000
Telephone 1,500
Utilities 6,000
Rent 10,000
Conferences, Conventions, and Meetings 5,000
Cost of Booklet “How to Cope with Cancer” 1,000
Miscellaneous 3,000

• Accrued expense at year-end amounted to P1,000 for utilities and P5,000 for salaries.
• The board of directors (BOD) specified that P10,000 should be used to purchase a new computer for
research purposes.

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Required: Prepare the journal entries to record the above events in the Unrestricted Current Fund.

Pledges receivable P300,000

Allowance for uncollectible pledges P30,000
Contribution revenue 270,000

Cash 260,000
Pledges receivable 260,000
To record Provision for doubtful pledges

Cash 40,000
Fund raising expense 5,000
Fund raising revenue 45,000

Investment 35,000
Cash 35,000
To record invested certificate of deposits

Cash 5,000
Other operating revenue 5,000
To record sales of booklet

Expenses 154,500
Cash 154,500
To record expenses during the year

Utilities Expense 1,000

Salaries expense 5,000
Accounts Payable 6,000
To record accrued expenses

Cash 10,000
Contribution revenue 10,000
To record donation received for acquisition of equipment

Property and equipment 10,000

Cash 10,000
To record purchase of equipment

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3. Among the transactions and events of Lifegroup School, a non-profit secondary school for the year ended
June 30, 20X1, are the following:

• Paid P50,000 from the Unrestricted Fund for classroom computers to be carried in the Plant Fund.
• Received an unrestricted cash gift of P200,000.
• Disposed of common stocks for P110,000, which had been carried in the Quasi-Endowment Fund at
P100,000. There were no restrictions on the use of the proceeds attributable to the gain.
• Constructed a new school building at a total cost of P2,000,000. A payment was made composed of
P250,000 from the Plant Fund and P1,750,000 obtained on a 5% mortgage note payable.

Rubric: Prepare the journal entries for the transactions of Lifegroup School for the year ended June 30,
20X1.

Rubric for grading:

CRITERIA POINTS
Complete and correct accounts with correct amounts 3
Incomplete but correct accounts with correct amounts 1

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