Question
In a particular month Golden Gate Medical Clinic, a private not-for-profit organization, reported the following: (1) It provided direct care to patients, billing them $400,000.
In a particular month Golden Gate Medical Clinic, a private not-for-profit organization, reported the following: (1) It provided direct care to patients, billing them $400,000. Of this amount, it received $120,000 in cash, but as a consequence of bad debts it expects to collect a total of only $330,000. (2) It provided direct care to patients covered by insurance and group plans for which, at standard rates, it would have billed $650,000. However, owing to contractual agreements with the payers, it actually billed them for and expects to collect only $480,000. (3) It provided charity care for which it would have billed, at standard rates, $82,000. (4) It received capitation fees of $1,400,000 from health care plans and provided service to members of those plans for which it would have billed, at standard rates, $1,600,000. Prepare appropriate journal entries to record revenue.
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