For the month of December 2014, patient charges at Northfield Hospital (a not-for-profit hospital) were $2,720,000. Third-party payors were billed $1,800,000.
A) Prepare the necessary journal entry to record the revenue and receivables.
B) $520,000 of the $2,720,000 was expected to be uncollectible as a bad debt. Prepare the necessary journal entry to record the revenue and receivables.
C) In this month, there were several patients that had no health insurance due to their low income level, the hospital decided that $85,000 of receivables would not be collectible because the patients were indigent. Prepare the necessary journal entry to reflect the decision to consider the $85,000 as charity care.
D) The Hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,710,000. Prepare the necessary journal entry to record the contractual adjustments.