A hospital reported the following uncollectible amounts:
$ 10,000 for services rendered to homeless individuals with no intention of collection.
$ 30,000 for services rendered with the expectation of collection,but which proved to be uncollectible.
What amount should be reported in revenues and bad debt expense for these items?

Question

Quizplus · Accepted Answer

The $30,000 should be included in revenues as it was initially expected to be collected, but it becomes a bad debt expense when it proves uncollectible. The $10,000 is not included in revenues as there was no intention of collection from the start.

A Hospital Reported the Following Uncollectible Amounts