Bad and Debt Use Additional Information from 10-K to Explain Linkages Among Financial Statements Community Health Systems operates general acute care hospitals in communities across the United States. The company reports the following information in Schedule il of its 2017 10-K. SCHEDULE 1R-VALUATION AND QUALIFYING ACCOUNTS Balance at Acquisitions Balance Beginning Write at End of Year Dispositions Expense December 31, 2017 allowance for doubtful accounts $21133085 502.965) 53.910 December 31, 2016, allowance for doubtful accounts 4.151 (369) 2,877 2,849 3810 December 31, 2015, allowance for doubtful accounts 3.539 (17) 3.200 (2.5701 4.152 Accounts receivable represents the amount customers owe Community Health Systems for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay. Community Health Systems balance sheet and income statement reported the following Smillions Offs of Year Smillions 2017 2016 2015 Revenue $18,398 $21.275 $22.564 Operating income foss) before tax (1.897) (869) 1,350 Total assets 17.450 21.944 26,861 2. What trend is implied by the common size analysis of bad debt expense? Community Health Systems has of the company had recorded bad debt expense of $2,580 in 2017 (which is 550s less than actually recorded), which of the following would be true? (ignore taxes for this question.) 1. The company would have reported operating loss of $1,392 and cash flow would have been $505 higher, 2 2 3. The company would have reported operating loss of $2,402 and cash flow would have been s505 higher The company would have reported operating loss of $1,392 and cash flow would have been unchanged The company would have reported operating loss of $1,897 and cash flow would have been unchanged 4 Bad and Debt Use Additional Information from 10-K to Explain Linkages Among Financial Statements Community Health Systems operates general acute care hospitals in communities across the United States. The company reports the following information in Schedule il of its 2017 10-K. SCHEDULE 1R-VALUATION AND QUALIFYING ACCOUNTS Balance at Acquisitions Balance Beginning Write at End of Year Dispositions Expense December 31, 2017 allowance for doubtful accounts $21133085 502.965) 53.910 December 31, 2016, allowance for doubtful accounts 4.151 (369) 2,877 2,849 3810 December 31, 2015, allowance for doubtful accounts 3.539 (17) 3.200 (2.5701 4.152 Accounts receivable represents the amount customers owe Community Health Systems for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay. Community Health Systems balance sheet and income statement reported the following Smillions Offs of Year Smillions 2017 2016 2015 Revenue $18,398 $21.275 $22.564 Operating income foss) before tax (1.897) (869) 1,350 Total assets 17.450 21.944 26,861 2. What trend is implied by the common size analysis of bad debt expense? Community Health Systems has of the company had recorded bad debt expense of $2,580 in 2017 (which is 550s less than actually recorded), which of the following would be true? (ignore taxes for this question.) 1. The company would have reported operating loss of $1,392 and cash flow would have been $505 higher, 2 2 3. The company would have reported operating loss of $2,402 and cash flow would have been s505 higher The company would have reported operating loss of $1,392 and cash flow would have been unchanged The company would have reported operating loss of $1,897 and cash flow would have been unchanged 4