Response to the following problem:
Good care Hospital has $100,000 of accounts receivable at December 31, 20X1. It is estimated that 7 percent of these accounts will be uncollectible by reason of charity care, 10 percent will not be collectible because of contractual adjustments, and 4 percent will prove to be bad debts.
Required:
(1) Make the necessary adjusting entries at December 31, 20X1, and
(2) indicate how the receivables should be reported in the hospital's balance sheet for December 31, 20X1.