A non-profit hospital reported revenues and gains in excess of expenses of $1,000,000 during the year, but its fund balance declined by $200,000.

A non-profit hospital reported revenues and gains in excess of expenses of $1,000,000 during the year, but its fund balance declined by $200,000. What could explain this?

A.Transfer to a parent of $1,200,000

B.Depreciation expense of $1,200,000

C.Transfer to a subsidiary of $1,200,000

D.Increase in receivables of $1,200,000