Having some trouble working through this case study and hoping for some insight. The case study is about a medical practice that recently switched management and is now getting mixed results in their accounting sheets.

Case Study is attached along with the relevant financial documents. The questions I need help with are visable in the last image. I only need help with question #1a and #3a,b,c

Incase questions are not visable they are:

1a) Discuss the differences in the Financial Statements and the effect that thesedifferences have on the Revenues and Receivables.

3a) Recompute the Income Statement and Balance Sheet provided by PMI on December 31, 2011 to make the two years comparable.

3b) Recalculate the Statement of Cash Flows provided by PMI for December 31, 2011 using the recalculated Income Statement and Balance Sheet as well as the correct beginning account balances.

3c) Discuss the differences between the Statement of Cash Flows provided by PMI and the Statement of Cash Flows prepared by you.

Thanks!

Introduction I. Dr. Sally Jones, a practicing Orthopedic Surgeon, is the managing partner at Sunset Medical', a professional corporation located in Colorado. Sunset, which has been in business for approximately 10 years, is a small medical practice with 2010 revenues of just over $1,000,000 The practice employs a support staff that includes an office manager, billing secretary, nurse, and radiology technician. In addition to the staff, Sunset retains Jackson and Associates, a CPA firm, to provide financial statements and tax documents. As a small, privately held corporation, Sunset is only required to submit an Income Statement and Balance Sheet using cash basis accounting, which Jackson and Associates prepares. Most of the staff and the CPA firm have been with Sunset Medical for all ten vears of Sunset's operation. Exhibits1 and 2 show the Income Statements and Balance Sheets provided by Jackson and Associates for the years 2008, 2009, and 2010 In January 2011, Sunset was considering the purchase of a new X-Ray machine and attended a trade show to do some research. While attending the trade show, Dr. Jones was approached by Ron Wilson of Physicians Management Inc. (PMI) with a proposal to provide management and billing services to Sunset Medical. Mr. Wilson is the founder and CEO of PMI, a two-year old medical billing and administrative service company serving the southwest United States. PMI based its value proposition on increasing revenues, decreasing administrative expenses, and helping manage cash flows. Since administrative paperwork and billing averages between 4 and 9 percent of the expenses for most healthcare providers, not including lost revenue from billing errors, Dr. Jones decided to hire PMI to manage the practice. On February 3, 2011, a contract was signed, effectively turning over management duties of Sunset Medical to PMI. II. The Physicians Management Contract A few key points from the contract between Sunset Medical and PMI include the scope of the engagement, party responsibility, and compensation of PMI. Exhibits 3 and 4 contain excerpts from the contract discussing authority, responsibility, and compensation. Under the initial contract, PMI was to serve as the manager of the practice and assist the Business Office Manager Introduction I. Dr. Sally Jones, a practicing Orthopedic Surgeon, is the managing partner at Sunset Medical', a professional corporation located in Colorado. Sunset, which has been in business for approximately 10 years, is a small medical practice with 2010 revenues of just over $1,000,000 The practice employs a support staff that includes an office manager, billing secretary, nurse, and radiology technician. In addition to the staff, Sunset retains Jackson and Associates, a CPA firm, to provide financial statements and tax documents. As a small, privately held corporation, Sunset is only required to submit an Income Statement and Balance Sheet using cash basis accounting, which Jackson and Associates prepares. Most of the staff and the CPA firm have been with Sunset Medical for all ten vears of Sunset's operation. Exhibits1 and 2 show the Income Statements and Balance Sheets provided by Jackson and Associates for the years 2008, 2009, and 2010 In January 2011, Sunset was considering the purchase of a new X-Ray machine and attended a trade show to do some research. While attending the trade show, Dr. Jones was approached by Ron Wilson of Physicians Management Inc. (PMI) with a proposal to provide management and billing services to Sunset Medical. Mr. Wilson is the founder and CEO of PMI, a two-year old medical billing and administrative service company serving the southwest United States. PMI based its value proposition on increasing revenues, decreasing administrative expenses, and helping manage cash flows. Since administrative paperwork and billing averages between 4 and 9 percent of the expenses for most healthcare providers, not including lost revenue from billing errors, Dr. Jones decided to hire PMI to manage the practice. On February 3, 2011, a contract was signed, effectively turning over management duties of Sunset Medical to PMI. II. The Physicians Management Contract A few key points from the contract between Sunset Medical and PMI include the scope of the engagement, party responsibility, and compensation of PMI. Exhibits 3 and 4 contain excerpts from the contract discussing authority, responsibility, and compensation. Under the initial contract, PMI was to serve as the manager of the practice and assist the Business Office Manager