How does this income statement differ from the one presented in Table 3.1?

Table 3.1?

Answer problems 3.2, 3.3, 3.5, 3.6

Problems

3.1 Entries for the Warren Clinic 2007 income statement are listed below in

alphabetical order. Reorder the data in proper format.

Bad debt expense $ 40,000

Depreciation expense 90,000

General/administrative expenses 70,000

Interest expense 20,000

Interest income 40,000

Net income 30,000

Other revenue 10,000

Patient service revenue 440,000

Purchased clinic services 90,000

Salaries and bene%uFB01ts 150,000

Total revenues 490,000

Total expenses 460,000

3.2 Consider the following income statement:

BestCare HMO

Statement of Operations

Year Ended June 30, 2007

(in thousands)

Revenue:

Premiums earned $26,682

Coinsurance 1,689

Interest and other income 242

Total revenues $28,613

Expenses:

Salaries and bene%uFB01ts $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

Table 3.1?

b. Did BestCare spend $367,000 on new %uFB01xed assets during %uFB01scal year

2007? If not, what is the economic rationale behind its reported


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