A Hospital Corporation Contracted with a Private Company to Collect

question 128

Essay

A hospital corporation contracted with a private company to collect fees and maintain health facilities that adjoin its property.Users of the health facility can pay cash of $10 for a daily visit or they can purchase a pass.The pass has a magnetic strip that is swiped through the entrance device each time an individual enters the facility.This subtracts a daily fee from the pass balance for each day used.The passes are issued for a fee of $365,which are good for 365 days.Refunds are not issued on the pass.Last year,$18,650 was collected for daily visits,$438,000 of annual passes were issued,and $206,225 of pass usage was registered on the scanning equipment.How much should the company recognize as revenue for the year? Explain how the revenue recognition rule should be applied in this case.

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Definitions:

Self-recognition

The ability of an individual to recognize themselves in a mirror or photograph, often considered a milestone in cognitive development.

Self-regulation

The ability of an individual to manage their emotions, thoughts, and behaviors in accordance with long-term goals.

Social Referencing

Understanding an ambiguous situation by seeking another person’s perception of it.

Stranger Anxiety

A developmental situation where infants begin to exhibit distress or wariness in the presence of unfamiliar people.