General accounting question Sunrise Healthcare Center (SHC) has a contract with an insuranceprovider covering 20,000 members. The insurance companyreimburses SHC on a fee-for-service basis at an average rate of $12,000per admission. Financial information for SHC is as follows:Average revenue per admission: $12,000 Average variable cost peradmission: $5,000 Direct fixed cost (overhead): $10,500,000Required:1. Calculate the break-even volume for SHC.2. If SHC served 2,200 patients last year from this insuranceprovider, calculate the degree of operating leverage at thisvolume.

Step 1: Definition of Break-even Volume and Degree of Operating LeverageBreak-even Volume: The…

Answered: Sunrise Healthcare Center (SHC) has a…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 4RE

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The NYU hospital has an arrangement with Queens College to provide hospital care to the QC’s members at a specific rate per member, per month. In April the QC paid the hospital $500,000 per agreement for patients treated in March. Based on pre-established billing rates, the hospital would have billed the QC $600,000. How much revenue should NYU recognized? $0 $500,000 $600, which is correct
Bluegrass Community Hospital (BCH) has the following payer groups: Number of Admissions Average Revenue per Admission Variable Cost per Admission Commercial 1,000 $5,000 $3,000 BCBS 4,000 $4,500 $4,000 Medicare 8,000 $7,000 $2,500 Given: BCH annual fixed costs are $38M What is BCH’s net income? If half of the 100,000 covered lives in the Commercial group moved to a capitated rate and utilization and cost data remained the same, what PMPM rate should be charged to maintain the Commercial group net income share? What would BCH net income be if the Commercial capitated group admissions decreased by 10%? What would BCH net income be if the Commercial capitated group admissions decreased by 10% and variable costs for the Commercial capitated group decreased to $2,200?
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clin-ics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics $90per hour and has variable costs of $75.60 per hour (this includes the payment to the nurse). Totalfixed costs equal $321,000.Required:1. Calculate the contribution margin per unit and the contribution margin ratio.2. Calculate the sales revenue needed to break even.3. Calculate the sales revenue needed to achieve a target profit of $100,000.4. What if Health-Temp had target operating income (profit) of $110,000? Would sales revenuebe larger or smaller than the one calculated in Requirement 3? Why? By how much?
Compute and record workers' compensation insurance premiums for Fairlawn Manufacturing as follows: 1. The firm estimates that its office employees will earn $57,000 next year and its factory employees will earn $184,000. The firm pays the following rates for workers' compensation insurance: $0.50 per $100 of wages for the office employees and $4.00 per $100 of wages for the factory employees. Compute the estimated premiums for 20X1. In the general journal, record the payment of the estimated premium. Date the entry as January 12, 20X1. 2. On January 3, 20X2, an audit of the firm's payroll records for 20X1 showed that the firm had actually paid wages of $59,000 to its office employees and $187,000 to its factory employees. Compute the actual premium for the year and the balance due to the insurance company or the credit due to the firm. In the general journal, record the entry to adjust the Workers' Compensation Insurance Expense as of the end of 20X1. Date the entry December 31, 20X.…
For the month of June 2023, patient charges at Southfield Hospital (a not-for-profit hospital) were $2,940,000. Third-party payers were billed $1,900,000. The hospital estimated that contractual adjustments would reduce the amount collected from their-party payers to $1,790,000. Prepare the neccessary journal entry to record the contractual adjustments.
Delaware Medical Center operates a general hospital. The medical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Delaware charges each separate entity for common services, such as patients' meals and laundry, and for administrative services, such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. Delaware Medical Center charged the following costs to Pediatrics for the year ended June 30, 20x1: Dietary Janitorial Laundry Laboratory Pharmacy Repairs and maintenance General and administrative Rent Billings and collections. Total Annual Patient Days Up to 22,000 22,001 to 26,000 26,001 to 29, 200 Aides 20 25 31 Patient Days (variable) $ 580,000 270,000 440,000 320,000 Nurses 10 14 16 220,000 $1,830,000 During the year ended June 30, 20x1, Pediatrics charged each patient an average of $300 per day, had a capacity of 50 beds, and…
Delaware Medical Center operates a general hospital. The medical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Delaware charges each separate entity for common services, such as patients’ meals and laundry, and for administrative services, such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. Delaware Medical Center charged the following costs to Pediatrics for the year ended June 30, 20x1: Patient Days (variable) Bed Capacity (fixed) Dietary $ 540,000 — Janitorial — $ 71,000 Laundry 240,000 — Laboratory 400,000 — Pharmacy 320,000 — Repairs and maintenance — 33,000 General and administrative — 1,320,000 Rent — 1,570,000 Billings and collections 230,000 — Total $ 1,730,000 $ 2,994,000…
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
Delaware Medical Center operates a general hospital. The medical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Dela-ware charges each separate entity for common services, such as patients’ meals and laundry, and for administrative services, such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. Delaware Medical Center charged the following costs to Pediatrics for the year ended June 30, 20x1" Patient Days Bed Capacity Dietary ....................................................................... $600,000 — Janitorial .......................................................................— $70,000 Laundry…
Transactions (a) through (e) took place in Stoney Heights Private Hospital during the year ending December 31, 2019.a. Gross revenues of $5,000,000 were earned for service toMedicare patients.b. Expected contractual adjustments with Medicare, a third-party payor, are $2,500,000; and an allowance for contractual adjustments account is used by Stoney Heights.c. Medicare cleared charges of $5,000,000 with payments of $2,160,000 and total contractual allowances of $2,840,000 ($2,500,000 + $340,000).d. Interim payments received fromMedicare amounted to $250,000.e. The hospital made a lump-sum payment back toMedicare of $100,000.1. Record the transactions in the general journal.2. Calculate the amount of net patient service revenues.3. What is the net cash flow from transactions withMedicare?4. What adjustments must be made at year-end to settle up with Medicare and properly report the net patient service revenues after this settlement?
During 2024, the following transactions were recorded by the Port Hudson Community Hospital, a private-sector not-for-profit institution: 1. Gross charges for patient services, all charged to Patient Accounts Receivable, amounted to $1,661,000. Estimated contractual adjustments with third-party payors amounted to $411,000, and the hospital estimated implicit price concessions would total 35,200. 2. Charity services, not included in transaction 1, would amount to $70,000 had billings been made at gross amounts. 3. Other revenues received in cash were parking lot, $22,000, cafeteria, $34,200; gift shop, $5,800. 4. Cash gifts restricted by the donor for programs amounted to $27,700 for the year. During the year, $53,600 was expended for technician salaries supporting the program identified by the donor (Debit Operating Expense-Salaries and Benefits). 5. Mortgage bond payments amounted to $53,200 for principal and $30,400 for interest. Assume unrestricted resources are used. 6. During the…
Toren Inc. employs one person to run its solar management company. The employees gross income for the month of May is $6,000. Payroll for the month of May is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $400, state income tax of $75, health-care insurance premium of $200, and union dues of $50. The employee is responsible for covering 30% of his or her health insurance premium. A. Record the journal entry to recognize employee payroll for the month of May, dated May 31, 2017. B. Record remittance of the employees salary with cash on June 1.

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