A hospital originally recorded all patient services it provided as a $500,000 debit to accounts receivable. Upon review the hospital determined that a contractual adjustment of $200,000 needs to be made, and estimated bad debts of $5,000 need to be recorded. In addition, at the time the receivable was recorded the hospital did not realize $100,000 should be considered charity services. Based on the information provided, what is the net amount of accounts receivable that the hospital would report on its financial statements?

Question

Quizplus · Accepted Answer

The net accounts receivable is calculated by subtracting the contractual adjustment ($200,000), estimated bad debts ($5,000), and charity services ($100,000) from the original accounts receivable ($500,000), resulting in $195,000.

A Hospital Originally Recorded All Patient Services It Provided as a $500,000