Dirk Suffered a Heart Attack and Was Rushed to the Hospital

question 32

Multiple Choice

Dirk suffered a heart attack and was rushed to the hospital where heart surgery was performed.His total bill for medical services was $50,000.Dirk has a major medical policy with 80-20 coinsurance,a $1,000 calendar-year deductible,and a $5,000 out-of-pocket limit.The out-of-pocket limit applies to coinsurance only.Assuming this hospitalization was the first medical care that Dirk received during the year and that all of the hospital services were eligible for coverage under the policy,how much of the $50,000 bill will the insurer pay?

• A)$39,000
• B)$39,200
• C)$40,000
• D)$44,000

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Definitions:

Noncurrent Assets

Long-term assets that are not expected to be converted into cash, sold, or consumed within one year or the operating cycle, including property, plant, and equipment.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity position, measuring its ability to cover short-term liabilities with its most liquid assets.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, often recorded as assets on the balance sheet.