$3.$ St$.$ Steven$$s Hospital is a private not$-$for$-$profit entity providing health care services to citizens of a small rural community.

During the current month, the hospital engaged in the following transactions. Your responsibility, as the Senior Accountant, is to book the appropriate journal entries for St$.$ Steven's for the current month for patient service revenues along with any required adjustments based on the circumstances listed below in parts

a$)$ through e$)$ as well as the entries based on the information contained in parts f$)$ and g$).$

a$.$ Based on the hospital$$s established billing rate, services rendered to patients during the month amounted to $$3\mathrm{.}2$ million. $$275,000$ of the $$3\mathrm{.}2$ million amount was provided to indigents and will be considered charity care.

b$.$ $$2,500,000$ in patient services rendered will be billed to Alpha Medical Group; a third$-$party payor. Alpha Medical Group pays for services rendered to its customers based on a rate schedule for the types of procedures provided. Alpha will reimburse the hospital $$2,275,000$ for the services provided during the current month to its customers. Part of the agreement between St$.$ Steven$$s and Alpha Medical is that St$.$ Steven$$s will not bill Alpha$$s customers for the difference between the amounts that the hospital bills and the amount that Alpha pays the hospital.

c$.$ $$175,000$ in patient services rendered will be billed to uninsured patients which the hospital believes may be collectible. However, based on prior experience with uninsured patients, the Hospital estimates that $$75,000$ of the

$$175,000$ will still be uncollectible.

d$.$ $$250,000$ in patient services rendered was for services provided for hospital employees. The hospital provides a $50$ percent discount for services provided to its employees.

e$.$ How will the hospital recognize the $$275,000$ identified in part a$)$ as the value of charity services provided?

f$.$ The hospital is the defendant in a malpractice suit. Attorneys for the hospital are reasonably sure the hospital will be found liable. Their best estimate of the amount of loss is $$1,250,000.$ The hospital carries medical malpractice insurance with a $$500,000$ deductible clause.

g$.$ The hospital has numerous capital assets on its books. Straight$-$line depreciation on these assets totals $$125,000$ for the current period.