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Under Lennon Hospital’s rate structure, it earned patient service revenue of $10.3 million for the year ended December 31, 2015. However, Lennon did not expect to collect this entire amount because it deemed $2.05 million to be charity care and estimated contractual adjustments to be $930,000.
During 2015. Lennon purchased medical supplies from Harrison Medical Supply Company at a cost of $5,300. Harrison notified Lennon that it was donating the supplies to the hospital.
Lennon is a private not-for-profit entity:
a. How much should Lennon record as patient service revenue? (Enter your answer in millions rounded to 2 decimal place.)
b. How much should Lennon record as net patient service revenue? (Enter your answer in millions rounded to 2 decimal place.)
c. How should Lennon record the donation of the supplies? (Enter your answer in dollars not in millions.)
Calculate the total social security and medicare tax burden on a sole proprietorship earning 2016 profit of $300,000, assuming a singoe proprietorship.
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