Good Faith Hospital,operated by a religious organization,billed patients $4,000,000 for services rendered during the year ended June 30,20X9.The hospital realized cash of $3,500,000 from the patient billings because of the following reductions:
(1)contractual adjustments of $140,000 granted to private insurance companies and to the federal government;and
(2)uncollectible accounts receivable of $360,000.
On the statement of operations prepared for the year ended June 30,20X9,Good Faith Hospital should report net patient service revenue of:

Question

Quizplus · Accepted Answer

Net patient service revenue is the amount of gross patient service revenue minus any contractual adjustments and uncollectible accounts.

Therefore, Net patient service revenue = $4,000,000 - $140,000 - $360,000 = $3,500,000.

Thus, the hospital should report net patient service revenue of $3,500,000 on the statement of operations prepared for the year ended June 30,20X9.

Good Faith Hospital,operated by a Religious Organization,billed Patients $4,000,000 for Services