For the Month of December 2011, Patient Charges at Northfield

question 47

Essay

For the month of December 2011, patient charges at Northfield Hospital (a not-for-profit hospital) were $2,720,000. Third-party payors were billed $1,800,000.
The hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,710,000.
Required:
Prepare the necessary journal entry to record the contractual adjustments.

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Definitions:

E-Sign

The use of electronic signatures to sign documents and agreements, legally recognized as equivalent to handwritten signatures under certain jurisdictions and laws.

Electronic Records

Digital form of information storage, used across various sectors for efficient and accurate information management.

Uniform Electronic Transactions Act

A law adopted by many states in the U.S. that establishes the legal validity of electronic records and signatures in commercial and governmental transactions.

Electronic Contracts

Agreements formed, signed, or executed electronically, which are legally binding under electronic commerce laws.