Question

In accordance with its established billing rates, Alpha Hospital provided services amounting to $14 million during the year ended December 31, 2018. The hospital's best estimate of transaction price included contractual adjustments of $3 million and charity patient care of $1 million. What amount should Alpha report as patient service revenue in its year 2018 operating statement?

Answer 1

Answer:

$10,000,000

Explanation:

Given:

Total service provided amount = $14,000,000

Contractual adjustments = $3,000,000

Charity to patient care =  $1,000,000

Total Revenue for year 2018 = ?

Computation of Total Revenue for year 2018 :

Total Revenue for year 2018 = Total service provided amount - (Contractual adjustments + Charity to patient care)

Total Revenue for year 2018 = $14,000,000 - ($3,000,000 + $1,000,000)

Total Revenue for year 2018 = $14,000,000 - ($4,000,000)

Total Revenue for year 2018 = $10,000,000