See attached file.
Case Study - Prepare a response to each questions from the case study, "Case 3, Charitable Contributions and Debt: A Comparison of St. Jude Children's Research Hospital/ALSAC and Universal Health Services" from Chapter 5 of the text, Mastery of the Financial Accounting Research System (FARS) through Cases, in which you address the following questions from the case study:
Questions from Requirement A
Requirement A: Recording Revenue
1. What is meant by the reference in Table 5.3-1 to an FAS 116 adjustment?
2. How are contributions recorded? Is there a distinction between pledges receivable and accounts
3. Are there circumstances when financial statements can quantify volunteers' services?
4. Can financial statement users of not-for-profit hospitals' financial statements expect to be fully
informed regarding affiliated parties, such as the linkages between St. Jude Children's Research
Hospital, ALSAC, and the foundation cited? Explain.
How would your answers to Requirements A differ if the government owned and operated the hospital?© BrainMass Inc. brainmass.com June 3, 2020, 11:40 pm ad1c9bdddf
NOTE: The answer includes how they would differ if the government owned and operated the hospital.
Financial Accounting Standards No. 116, Accounting for Contributions, applies to four types of private nonprofit organizations including health care organizations. The reference to an FAS 116 adjustment in Table 5.3-1 means that in accordance with FAS 116 contributions received and have been recognized, but the promise to do so has failed to materialize and has to be 'derecognized.' Contributions, as defined by the FAS, are the unconditional, with no strings attached, transfer of cash or other assets including equipment, vehicles, land and promises of cash.
On other hand, if the hospital is owned and operated by the government, there would have been no adjustment as contributions or revenues are only recorded by the government if they can be reasonably collected within 60 days from the close of the government's fiscal year. Hence, if the collection was doubtful, the contributions would not have been ...
Charitable contributions and debt for St. Jude and Universal Health Services are examined.