Question

During the month of December, Godiva Hospital billed patients $55,000, billed 3rd parties $65,000, and provided $10,000 of charity care. How much should Godiva report as Accounts Receivable?

Answer 1

Godiva Hospital should report a total of $120,000 as Accounts Receivable for December, which is the sum of amounts billed to patients and third parties, excluding the charity care.

Step-by-step explanation:

To determine how much Godiva Hospital should report as Accounts Receivable for the month of December, we should consider the amounts billed to patients and third parties which are expected to be collected, but not the charity care provided, as it is not intended to be collected on. Hence, the account receivables for Godiva Hospital will be the sum of the amounts billed to patients and third parties.

The calculation is straightforward:

• Billed patients: $55,000
• Billed 3rd parties: $65,000
• Charity care: $10,000 (not included in Accounts Receivable)

The total Accounts Receivable for Godiva Hospital would be $55,000 (billed to patients) plus $65,000 (billed to third parties), which equals $120,000. Charity care is not counted as it will not be collected.