11.3 Consider this income statement: Green Valley Nursing Home Inc. Statement of Income Year Ended December 31,...
Question:
11.3 Consider this income statement:
Green Valley Nursing Home Inc. Statement of Income Year Ended December 31, 2012
Revenue:
Resident services revenue $3,163,258
Other revenue 106,146
Total revenues $3,269,404
Expenses:
Salaries and benefits $1,515,438
Medical supplies and drugs 966,781
Insurance and other 296,357
Provision for bad debts 110,000
Depreciation 85,000
Interest 206,780
Total expenses $3,180,356
Operating income $ 89,048
Provision for income taxes 31,167
Net income $ 57,881
a).How does this income statement differ from the ones present edin Exhibit11.1 and Problem11.2?
b. Why does Green Valley show a provision for income taxes while the other two income statements do not?
c. What is Green Valley’s total (profit) margin? How does this value compare with the values for Park Ridge Homecare Clinic and BestCare HMO?
EXHIBIT 11.1
Park Ridge Homecare Statement of Operations for Year Ended December 31, 2012 and 2011 (in thousands)
Revenues: 2012 2011
Patient service revenue $ 4,042 $ 2,687
Provision for bad debts 46 21
Net patient service revenue $ 3,996 $ 2,666
Other operating revenue 27 32
Total revenues $ 4,023 $ 2,698
Expenses:
Salaries and benefits $ 2,714 $ 1,835
Supplies and drugs 1,042 675
Insurance 90 83
Depreciation 21 15
Interest 16 19
Total expenses $ 3,883 $ 2,627
Operating income $ 140 $ 71
Nonoperating income:
Contributions $ 10 $ 22
Investment income 13 6
Total nonoperating income $ 23 $ 28
Net income (excess of revenues over expenses) $ 163 $ 99
Expert Answer:
1 WHAT IS THE PRIMARY DIFFERENCE Ans Thera are basically two method to prepare income statement name... View the full answer
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078025778
17th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
