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,the hospital did not consider $100,000 of charity services provided.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

- Start with the original debit to accounts receivable of $500,000.
- Subtract the contractual adjustment of $200,000: $500,000 - $200,000 = $300,000.
- Add the estimated bad debts of $5,000: $300,000 + $5,000 = $305,000.
- Subtract the charity services of $100,000: $305,000 - $100,000 = $205,000.
Therefore, the net amount of accounts receivable that the hospital would report on its financial statements is $195,000.

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