Question

se Additional Information from 10-K to Explain Linkages Among Financial Statements ommunity Health Systems operates general acute care hospitals in communities across the United State SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Balance at Acquisitions Bad Balance Beginning and Debt Write at End $ millions of Year Dispositions Expense Offs of Year December 31, 2017, allowance for doubtful accounts $3,660 $(20) $2,962 $(2,848) $3,754 December 31, 2016, allowance for doubtful accounts 3,987 (354) 2,764 (2,736) 3,661 December 31, 2015, allowance for doubtful accounts 3,399 (16) 3,073 (2,469) 3,987 Accounts receivable represents the amount customers owe Community Health Systems for services renderec of the amount that customers will not repay. Community Health Systems' balance sheet and income statemer $ millions 2017 2016 2015 Revenue $18,398 $21,275 $22,564 Operating income (loss) before tax (1,822) (834) 1,297 Total assets 17,450 21.944 26,861 a. 1. Compute the common-size allowance for doubtful accounts for each year. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). 2017 2016 2015 Common size allowance % X 17.2% x 17.7% X 2. What conclusion may be drawn by analysts in comparing the common size allowance in 2017 to the previous yea Collecting cash from customers now is more difficult b. On average, the firms in the S&P 500 report common-size allowance for doubtful accounts between 3% and 596. Community Health Systems now has: relatively more charges to patients not expected to pay in full 1. Compute the common-size bad debt expense for each year. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). 2017 2016 2015 Common size allowance 16.1% 13 13.6% 18013 F5

Answer 1

a 1)	Com. Size Allow for DoubtAccounts = Year end balance / Year end total assets
	Allow for D/A	Total Assets	Common Size Allow for D/A (%)
2017	3754	17450	21.51
2016	3661	21944	16.68
2015	3987	26861	14.84

All other answers are correct.