For the year ended December 31, 20X3, how much should Dodge report as net patient service revenue?

a. $4,500,000

b. $5,000,000

c. $5,500,000

d. $5,740,000 

Under its established rate structure, Dodge Hospital would have earned patient service revenue of $5,000,000 for the year ended December 31, 20X3. However, Dodge did not expect to collect this amount because of contractual adjustments of $500,000 to third-party payers. In May 20X3, Dodge purchased bandages from Hunt Supply Company at a cost of $1,000. However, Hunt notified Dodge that the invoice was being canceled and that the bandages were being donated. On December 31, 20X3, Dodge had board-designated assets consisting of $40,000 in cash and investments of $700,000