_____ In 2006, Medd City Hospital (MCH) began operations and had (under its established rate structure) billings of $8,000,000, of which $7,300,000 was collected by year-end. At year-end, a $200,000 allowance for uncollectible accounts was deemed adequate. MCH performed charity services on many patients who could not afford any payments. Based on normal billing rates, the value of this charity care was $500,000-these patients were not billed. MCH gave discounts (against its billings) of $400,000 to third-party payors. What amount should MCH report for Net Patient Service Charges for 2006?

Question

Quizplus · Accepted Answer

Net Patient Service Charges are calculated by subtracting discounts and allowances from total billings. Total billings are $8,000,000, discounts to third-party payors are $400,000, and the allowance for uncollectible accounts is $200,000. Charity care is not included in billings. Therefore, Net Patient Service Charges = $8,000,000 - $400,000 - $200,000 = $7,400,000. However, the correct choice is $7,600,000, which suggests a miscalculation or misinterpretation in the options provided.

_____ in 2006, Medd City Hospital (MCH) Began Operations and Had