Question: 1. Under the accrual basis of accounting, patient revenues are recognized in the accounting period in which:
a. Payment is received?
b. The bill is sent to the patient / insurance company?
c. The net payment amount can be reasonably estimated
d. The services were rendered
2. Deerfield Hospital purchased a robot for the pharmacy which cost $2,000,000 on 01/01/2014. It estimates that the equipment will have a useful life of 5 years and will be worthless (no salvage value) at life end. Assuming Deerfield Hospital has a December 31st year end and uses straight-line depreciation, what is the amount of annual depreciation expense and total accumulated depreciation as of 12/31/2015?
a. Depreciation expense of $500,000 and accumulated depreciation of $1,000,000
b. Depreciation expense of $500,000 and accumulated depreciation of $500,000
c. Depreciation expense of $400,000 and accumulated depreciation of $400,000
d. Depreciation expense of $400,000 and accumulated depreciation of $800,000