7. A medical practice bills $10,000 worth of patient visits in the month of May, but...
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7. A medical practice bills $10,000 worth of patient visits in the month of May, but only collects $5,000 of this amount before the month ends. In addition, the practice collects $3,000 from prior months' bills to patients. During May, the practice had $9,000 in total expenses but only paid $7,500 of these expenses in cash during the month. Further, the practice paid out $1,000 of expenses from prior months. a. What are the revenues, expenses, and net income of the practice for May if it uses the accrual basis of accounting? b. What are the revenues, expenses, and net income of the practice for May if it uses the cash basis of accounting? c. Which better represents the profitability of practice during May? Why? 7. A medical practice bills $10,000 worth of patient visits in the month of May, but only collects $5,000 of this amount before the month ends. In addition, the practice collects $3,000 from prior months' bills to patients. During May, the practice had $9,000 in total expenses but only paid $7,500 of these expenses in cash during the month. Further, the practice paid out $1,000 of expenses from prior months. a. What are the revenues, expenses, and net income of the practice for May if it uses the accrual basis of accounting? b. What are the revenues, expenses, and net income of the practice for May if it uses the cash basis of accounting? c. Which better represents the profitability of practice during May? Why?
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Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
Posted Date:
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