Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 7

A private not-for-profit health care entity provides its patients with services that would normally be charged at $1 million.However, it estimates a $200,000 reduction because of contractual adjustments.It expects another $100,000 reduction because of bad debts.Finally, the organization does not expect to collect $400,000 because this amount is deemed to be charity care.Which of the following is correct a.Patient service revenues = $1 million; net patient service revenues = $300,000.
B)Patient service revenues = $1 million; net patient service revenues = $400,000.
C)Patient service revenues = $600,000; net patient service revenues = $300,000.
D)Patient service revenues = $600,000, net patient service revenues = $400,000.