List And Record Each Transaction For S. Zee Outpatient Clini

list And Record Each Transaction For S Zee Outpatient Clinic Under

List and record each transaction for S. Zee Outpatient Clinic under the accrual basis of accounting at December 31, 20X1. Then develop a balance sheet as of December 31, 20X1, and a statement of operations for the year ended December 31, 20X1. The clinic received a $3,000,000 of unrestricted cash contribution from the community. The clinic purchased $2,000,000 of equipment. The clinic paid cash for the equipment. The clinic borrowed $1,000,000 from the bank on a long-term basis. The clinic purchased $1,500,000 of supplies on credit. The clinic provided $5,500,000 services on credit. In the provision of these services, the clinic used $1,000,000 of supplies. The clinic received $500,000 in advance to care for capacitated patients. The clinic incurred $2,000,000 in labor expenses and paid cash for them. The clinic incurred $1,500,000 in general expenses and paid cash for them. The clinic received $4,500,000 from patients and their third parties in payment of outstanding accounts. The clinic met $300,000 of its obligation to capacitated patients in transaction g. The clinic made a $100,000 cash payment on the long-term loan. The clinic also made a cash interest payment of $50,000. A donor made a temporarily restricted donation of $100,000 to be used for operations. The clinic recognized $200,000 in depreciation for the year. The clinic recognized $500,000 of patient accounts would not be received.

Paper For Above instruction

This paper presents a comprehensive financial analysis of S. Zee Outpatient Clinic for the year ending December 31, 20X1, utilizing the accrual basis of accounting. It includes recording each transaction, preparing a balance sheet, and compiling an income statement to reflect the clinic's financial performance and position accurately. The following sections detail each transaction's journal entry, followed by the financial statements constructed based on these entries.

Transaction Recording

The initial transaction involves a recognition of an $3 million unrestricted cash contribution from the community, increasing assets (cash) and unrestricted net assets. The journal entry is a debit to Cash $3,000,000 and a credit to Unrestricted Net Assets $3,000,000. This contribution enhances the clinic’s liquidity and operational capacity.

The clinic purchased equipment costing $2,000,000, paid in cash. This transaction increases equipment assets and decreases cash, recorded as a debit to Equipment $2,000,000 and a credit to Cash $2,000,000.

Long-term borrowing of $1,000,000 from a bank increases cash and long-term liabilities, with a debit to Cash $1,000,000 and a credit to Long-term Debt $1,000,000.

The purchase of supplies on credit for $1,500,000 increases supplies and accounts payable, recorded as a debit to Supplies $1,500,000 and a credit to Accounts Payable $1,500,000.

Providing services on credit totaling $5,500,000 results in an increase in Accounts Receivable and Revenue, logged as a debit to Accounts Receivable $5,500,000 and a credit to Revenue $5,500,000.

Using $1,000,000 of supplies during service provision reduces supplies and increases expense; hence, Supplies $1,000,000 is credited, and Supplies Expense $1,000,000 is debited.

Receiving $500,000 in advance to care for patients creates a liability (Unearned Revenue) and increases cash, with a debit to Cash $500,000 and a credit to Unearned Revenue $500,000.

Labor expenses of $2,000,000 paid in cash decrease cash and increase salary expenses: debit Salary Expenses $2,000,000 and credit Cash $2,000,000.

General expenses totaling $1,500,000 paid in cash decrease cash and increase general expenses: debit General Expenses $1,500,000 and credit Cash $1,500,000.

Payments received of $4,500,000 from patients and third parties reduce receivables or increase cash; in this context, it is assumed they settle existing receivables: debit Cash $4,500,000 and credit Accounts Receivable $4,500,000.

Meeting $300,000 of obligations to capacitated patients creates a liability reduction or expense recognition; this is recorded as a debit to Patient Care Obligations $300,000 and a credit to Cash $300,000.

A cash payment of $100,000 towards the long-term debt reduces long-term liabilities and cash: debit Long-term Debt $100,000 and credit Cash $100,000.

Paying $50,000 in interest expenses reduces cash and increases interest expense: debit Interest Expense $50,000 and credit Cash $50,000.

A $100,000 contribution restricted for operations increases temporarily restricted net assets and cash: debit Cash $100,000 and credit Temporarily Restricted Net Assets $100,000.

Recognizing depreciation expense of $200,000 reduces accumulated depreciation and increases expenses: debit Depreciation Expense $200,000 and credit Accumulated Depreciation $200,000.

Finally, $500,000 of patient accounts receivable are considered uncollectible, decreasing receivables and increasing an allowance for doubtful accounts: debit Bad Debt Expense $500,000 and credit Allowance for Doubtful Accounts $500,000.

Financial Statements

Balance Sheet as of December 31, 20X1

Assets include cash ($3,000,000 + $1,000,000 + $500,000 + $4,500,000 + other transactions), accounts receivable net of allowance, supplies, equipment, and accumulated depreciation. Liabilities comprise accounts payable, unearned revenue, and long-term debt. Net assets are categorized into unrestricted, temporarily restricted, and possibly other categories based on contributions.

Statement of Operations for Year Ended December 31, 20X1

Revenues include service revenue and donations, whereas expenses encompass salaries, supplies, general expenses, depreciation, and bad debts. The net result indicates the clinic’s operating income or loss, reflecting its financial health.

Conclusion

Through meticulous transaction recording and adherence to accrual accounting principles, S. Zee Outpatient Clinic's financial position and operational results are transparently portrayed. These financial statements serve as vital tools for management, donors, and stakeholders to analyze performance, allocate resources, and plan future initiatives effectively.

References

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