Health Care Providers -

Hospitals
3 categories of health care units
based on equity structure:

Investor-owned health care

entities
Governmental health care
entities
Voluntary not-for-profit
health care entities
 Funds

1. General Fund –unrestricted

fund
a. Assets whose use is limited
b. Agency Fund
c. Property and Equipment
2. Donor-Restricted Funds
- Temporarily and Permanently
restricted resources
a. Temporary restricted
i. Specific purpose fund
ii. Endowment Fund
iii. Plant Replacement and Expansion
Fund
iv. Other donor-restricted funds

b. Permanently Restricted Fund

Classification of
Assets and
Liabilities
Current Assets
Assets whose use is
limited
Property and
Equipment
 Net Assets

Permanently Restricted

Temporarily Restricted

Unrestricted Net Assets

 Liabilities

Current Liabilities
Long Term Liabilities
 Classification of
Revenues,
Expenses, Gains,
and Losses
Revenues and Gains
increase:
unrestricted net assets;
temporarily restricted net
assets; or
permanently restricted net
assets.
 Operating Revenues
1. Patient Service Revenues
a. Routine services
b. Other nursing services
c. Professional services

To record gross charges to patients

Accounts Receivable xx
Patient Service Revenues xx
Charity Care Services
Hospital criteria for charity care services that were
met

Charity Services xx
Accounts Receivable xx
Allowance Accounts
Doubtful accounts expense xx
Contractual Adjustments xx
Allowance for doubtful and
third-party contractual adjustments xx

Cash xx
Allow. for Uncollectible Receivables
and Third-party contractual adjustments xx
Accounts Receivable xx
2. Premium Fees (Subscriber
fee or capitation fee)

3. Resident Service Revenues

4. Other Operating Revenues

Inventories xx
Other Operating Revenues
-Unrestricted xx

Cash
Contributions receivable xx
Other Operating Revenues
-Temporarily Restricted xx

Reclassifications Out – Temporarily Restricted xx

Reclassifications In – Unrestricted xx
 Non-operating Revenue
 Unrestricted and donor-restricted pledges, gifts
or grants

 Unrestricted income from endowment funds

 Maturing term endowment funds

 Income and gain from investments

 Gains on sale of hospital property

Cash xx
Contributions Receivable xx
Non-Operating Revenues
-Temporarily Restricted xx

Reclassifications Out – Temporarily Restricted xx

Reclassifications In – Unrestricted xx
 Classification of
Operating Expenses
1. Nursing Services Expense
2. Other Professional Services
Expense
3. General Services Expense
4. Fiscal Services Expense
5. Administrative Services
Expense
6. Malpractice Insurance
Expense (if not allocated)
7. Depreciation Expense (if
not already allocated)
8. Interest Expense
9. Provision for Bad Debts
10. Other Services
Year-end allocation of expenses to the functional areas of which they
benefited.

Nursing Services xx
Other Professional Services xx
General Services xx
Fiscal Services xx
Administrative Services xx
Wages, Salaries & Benefits xx
Drugs & Supplies Used xx
Purchased Services xx
Medical Malpractice Costs xx
Depreciation Expense xx
Interest xx
Doubtful Accounts Expense xx
10. Closing Entries for Unrestricted, Temporarily & Permanently
Restricted Net Assets

Patient Service Revenues – Unrestricted xx

Other Operating Revenues – Unrestricted/
Temporarily Restricted/Permanently Restricted xx
Non-operating Revenues – Unrestricted/
Temporarily Restricted/Permanently Restricted xx
Reclassifications In - Unrestricted/
Temporarily Restricted/Permanently Restricted xx
Charity Care xx
Contractual Adjustments xx
Nursing Services xx
Other Professional Services xx
General Services xx
Fiscal Services xx
Administrative Services xx
Reclassifications Out - Unrestricted/
Temporarily Restricted/Permanently
Restricted xx
Unrestricted Net Assets / Temporarily
Restricted Net Assets / Permanently
Restricted Net Assets xx
Financial Statements of
Private Health Care
Provider – Hospital
 Santo Tomas University Hospital
Statement of Activities
For Year Ended December 31, 20x4

Unrestricted Temporarily Permanently Total

Restricted Restricted
Revenues, gains, and other support:
Patient service revenues P 5,304,000 P 5,304,000
Other Operating Revenues 266,400 P 900,000 1,166,400
Net Assets Released from restrictions:
Satisfaction of program restrictions 60,000 (60,000) 0
Satisfaction of equipment
acquisitions restrictions 240,000 (240,00) 0
Expiration of Time Restrictions 180,000 (180,00) 0
Total Operating Revenues and
other support P 6,050,000 P 420,000 P 6,470,40
Expenses and Losses:
Nursing Services P 2,128,800 P 2,128,800
Other Professional Services 1,488,000 1,488,000
General Services 1,194,000 1,194,000
Fiscal Services 339,600 339,600
Administrative Services 949,200 949,200
Total Expenses and losses P 6,099,600 P 6,099,600
Increase (Decrease) in net assets
from operations P (49,200) P 420,000 P 370,800
Non-operating revenues P 864,727 P 90,000 P 600,000 P 1,544,727
Increase(decrease) in net assets P 815,527 P 510,000 P 600,000 P 1,925,527
Net assets at beginning of year 5,445,600 1,054,800 4,272,000 10,772,400
Net assets at end of year P 6,261,127 P 1,564,800 P4,872,000 P 12,697,927
 Santo Tomas University Hospital
Statement of Financial Position
As of December 31, 20x4

Assets:
Cash and Cash Equivalents . . . . . . . . . . . . . . . P 882,000
Accounts and Interest receivable . . . . . . . . . . 1,089,600
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,200
Contributions Receivable . . . . . . . . . . . . . . . . . . 318,727
Short Term Investments . . . . . . . . . . . . . . . . . . . . . 480,000
Asset restricted to investment in land, building
& equipment . . . . . . . . . . . . . . . . . . . . . . . . 534,000
Asset limited in use under malpractice
funding agreement . . . . . . . . . . . . . . . . . . 528,000
Property, Plant & Equipment (net of depreciation) 6,300,000
Long-term Investments . . . . . . . . . . . . . . . . . . . . 648,000
Endowment Investments . . . . . . . . . . . . . . . . . . . . 4,872,000
Total Assets . . . . . . . . . . . . . . .. . . . . . . . . . P 15,749,527
Liabilities and Net Assets
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . P 63,600
Current Installments of long-term debts . . . . 96,000
Accrued Expenses . . . . . . . . . . . . . . . . . . . . . 120,000
Notes Payable . . . . . . . . . . . . . . . . . . . .. . . . . 600,000
Estimated Malpractice cost . . . . . . . . .. . . . . 768,000
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 1,404,000
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . P 3,051,600

Net Assets:
Unrestricted . . . . . . . . . . . . . . . . . . . . . . . . . . . P 6,261,127
Temporarily Restricted . . . . . . . . . . . . . . . . . . 1,564,800
Permanently Restricted . . . . . . . . . . . . . . . . . 4,872,000
Total Net Assets . . . . . . . . . . . . . . . . . . . . P 12,697,927
Total Liabilities and Net Assets . . . . . . . . . . . . . . . P 15,749,527
 Santo Tomas University Hospital
Statement of Cash Flows
For Year Ended December 31, 20x4

Cash flows from operating activities:

Cash received from patients and third-party payors P 4,460,000
Cash received from contributions . . . . . . . . . . . . . . . . 540,000
Interest and dividends received . . . . . . . . . . .. . . . . . . 738,000
Cash paid to employees and suppliers . . . . . . . . . . . (4,788,000)
Interest Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,200)
Net cash provided by (used for) operating activities P 970,800

Cash flows from investing activities:

Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . P (600,000)
Purchases of land, Building & Equipment . . . . . . . . . . (372,000)
Net cash provided by (used for) investing activities P (972,000)
Cash flows from financing activities:
Payments on Notes Payable . . . . . . . . . . . . . . . . . . . . P (240,000)
Payments on long-term debt. . . . . . . . . . . . . . . . . . . . ( 96,000)
Contributions received restricted for endowment. . . 600,000
Contributions received restricted for PPE. . . . . . . . . . . 240,000
Net cash provided by (used for) financing activities P 504,000

Net Increase (decrease) in cash and cash equivalents . . . . . P 502,800

Cash and cash equivalents at beginning of year . . . . . . . . . . 379,200
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . P 882,000
Reconciliation of change in assets to net cash provided by
(used for) operating activities:
Change in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 1,925,527
Adjustments to reconcile change in assets to net cash
provided by (used for) operating activities:
Depreciation . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 528,000
Increase in accounts receivable . . . . . . . . . . . . . . . (957,600)
Increase in contributions receivable . . . . . . . . . . . . (318,727)
Decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . 21,600
Increase in accounts payable and accrued liabilities 72,000
Contributions received restricted for endowment . . . . (600,000)
Contributions received restricted for PPE . . . . . . . .. . . . (240,000)
Increase in liability for estimated malpractice costs . . . 540,000
Net cash provided by (used for) operating activities P 970,800