Not-for-profit organization problem

  • Creator
    Topic
  • February 6, 2015 at 5:16 pm #191884
    JKJay
    Member

    Hi, I am doing Wiley TestBank and Ninja MC at same time.

    By doing two products, I found one problem on both products is same but answers are different.

    Problem is

    Hospital, Inc., a not-for-profit entity with no governmental affiliation, reported the following in its accounts for the current year ended December 31:

    Gross patient service revenue from all services provided

    at the established billing rates of the hospital (note

    that this figure includes charity care of $25,000) $775,000

    Provision for bad debts 15,000

    Difference between established billing rates and fees

    negotiated with third-party payers (contractual adjustments) 70,000

    What amount would the hospital report as net patient service revenue in its statement of operations for the current year ended December 31?

    Answer on Ninja is $665,000

    Answer on Wiley is $680,000.

    Wiley does not deduct Bad Debt expense.

    I did little research on it and it seems like answer is $665,000

    Which one is correct?

  • The topic ‘Not-for-profit organization problem’ is closed to new replies.