P11.1 Entries of the Warren Clinic 2012 income statement are listed below in alphabetical order. Reorder the data in the proper format.
Bad bet expense $40,000
Depreciation expense 90,000
General/administrative expense 70,000
Interest expense 20,000
Nonoperating income 40,000
Net Income 30.000
Other Operating Revenue 10,000
Patient Service Revenue 440,000
Purchased Clinic Services 90,000
Salaries and Benefits 150,000

P11.2Consider the following income statement:
BestCare HMO statement of operations Year ended june 30,2011 ( in thousands)
Revenue:
premiums earned 26,682
coinsurance 1,689
interest and other income 242
total revenues 28,613
Expenses:
salaries and benefits 15,154
medical supplies and drugs 7,507
insurance 3,963
provision for bad debts 19
depreciation 367
interest 385
total expenses 27,395
net income 1,218

a.) how does this income statement differ from the one presented in exhibit 11.1?
b) did the best care spend 367,000 on new fixed assets during fiscal year 2011?? If not, what is the total economic rationale behind its reported depreciation expense?
c) explain the provision for bad debts entry
d) What is BestCare”s total margin? How can it be interpreted?

 

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