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Topic
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Terry, an auditor, is performing test work for a not-for-profit hospital. Listed below are components of the Statement of Operations:
Revenue relating to charity care $100,000
Bad debt expense 70,000
Net Assets released from restrictions and used for operations 50,000
Other revenue 80,000
Net Patient Service Revenue (includes revenue related to charity care) 500,000
What amount would be reported as total revenues, gains, and other support on the Statement of Operations?
A. $460,000
Total revenues, gains, and other support on the Statement of Operations includes all Operating Revenues reported under Unrestricted Net Assets in the Statement of Activities.
This amount includes Net Patient Service Revenues (net of $100,000 Charity Care Revenues) of $400,000, Other Revenue (often called Other Operating Revenue) of $80,000, the portion of Temporarily Restricted Net Assets used for operations of $50,000 during the current period, and a reduction for bad debts of $70,000 for a total of $460,000.
B. $530,000
C. $580,000
D. $630,000
If this is a non profit hospital, then why are you excluding charity care revenues?
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