Answer the following questions. Be sure to show your work.

1.An uninsured patient receives services with charges of $5,000 from a hospital. The hospital staff bills the patient $1,000 and records $4,000 as charity care. If the hospitals ratio of cost to charges is 50%, what amount would the hospital recognize as charity care in Schedule H of IRS Form 990?

2.A hospital incurs $10 million of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were $20 million. What would the hospital report as the net community benefit expense in Schedule H of IRS Form 990?

3.A not-for-profit nursing home has total expenses of $20 million. Sales tax in the state is 7%. Expenses are broken down into salaries ($12 million), supplies ($6 million), and pharmacy ($2 million). Assuming that pharmacy items are exempt from state sales tax in this state, what is the benefit received by the nursing home from the sales tax exemption?