Ruby Ruth Hospital had the following transactions during the year ended December 31: 1. The hospital provided services to patients insured by third-party payer A amounting to $5.0 million at its established billing rates. The hospitals prospective billing arrangement with this third party stipulates payment to the hospital of 70 percent of its established rates for services performed. All billings were paid during the year. 2. The hospital provided services to patients insured by third-party payer B amounting to $3.0 million at its established billing rates. Its retrospective billing arrangement with this third party stipulates that the hospital should receive payment at an interim rate of 90 percent of its established rates, subject to retrospective adjustment based on agreed-upon allowable costs. By year-end, B had paid all the billings. Before issuing its financial statements, the hospital estimated that the probable amount it will need to refund to B is $250,000, based on allowable costs. 3. The hospital provided services to charity patients amounting to $1.0 million at its established billing rates. a) Prepare journal entries to record these transactions below. If no adjustment is necessary, select 'No debit (or credit) entry needed' in the account fields and enter 0 in the amount fields.

Accounting for patient service revenue Ruby Ruth Hospital had the following transactions during the year ended December 31: 1. The hospital provided services to patients insured by third-party payer A amounting to $5.0 million at its established billing rates. The hospital's prospective billing arrangement with this third party stipulates payment to the hospital of 70 percent of its established rates for services performed. All billings were paid during the year. 2. The hospital provided services to patients insured by third-party payer B amounting to $3.0 million at its established billing rates. Its retrospective billing arrangement with this third party stipulates that the hospital should receive payment at an interim rate of 90 percent of its established rates, subject to retrospective adjustment based on agreed-upon allowable costs. By year-end, B had paid all the billings. Before issuing its financial statements, the hospital estimated that the probable amount it will need to refund to B is $250,000, based on allowable costs. 3. The hospital provided services to charity patients amounting to $1.0 million at its established billing rates a) Prepare journal entries to record these transactions below. If no adjustment is necessary, select 'No debit (or credit) entry needed in the account fields and enter 0 in the amount fields. . Debit 5,000,000 Credit 0 5,000,000 0 Accounts Patient accounts receivable Patient service revenues 1a. To record services provided to Payer Apatients. Provision for contractual adjustments Patient accounts receivable 1b. To record adjustment for contractual rate. 0 1,500,000 0 0 1,500,000 0 0 X 0x 0 X 0 1c. To record payment received from Payer A. 0 0 X 0 0X 2a. To record services provided to Payer B patients 0 0 x 0 0 0 X 2b. To record adjustment for contractual rate. 0 0 X 0 X 0 2c. To record payment received from Payer B. 0 0 % 0 0 X 2d. To record retrospective adjustment. 0 0 0X 0 X 0 3a. To record services provided to charity patients. 0 OX 0 0 X 3b. To record adjustment for charity services. b) How much would Ruby Ruth Hospital report as patient service revenue in its operating statement for the year? $ 0 X