The following events were recorded on the books of Sheridan Hospital for the year ended December 31, 2025 . 1. Revenue from patient services totaled $16,100,000. The allowance for uncollectibles was established at $3,380,000. Of the $16,100,000 revenue, $5,950,000 was recognized under cost reimbursement agreements. This revenue is subject to audit and retroactive adjustment by third-party payers (estimated adjustments are included in the allowance account). 2. Patient service revenue is accounted for at established rates on the accrual basis. 3. Other operating revenue totaled $361,000, of which $168,000 was from specific purpose funds. 4. Mercy received $400,000 in unrestricted gifts and bequests. They are recorded at fair market value when received. 5. Endowment funds earned $160,000 in unrestricted income. 6. Board designated funds earned $88,000 in income. 7. Mercy's operating expenses for the year amounted to $13,240,000. This included $533,000 in straight-line depreciation. Statement of Activities