18. A not-for-profit hospital provides its patients with services that would normally be charged at $ 1 million. However, it estimates a $200,000 reduction because ofcontractual adjustments. It expects another $100,000 reduction because of bad debts. Finally, the hospital 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.