Question: need help with 3.6 only but use 3.5 for help 3.5 Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expenses other

need help with 3.6 only but use 3.5 for help
need help with 3.6 only but use 3.5 for help 3.5 Brandywine

3.5 Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. a. Construct Brandywine's 2011 income statement b. What were Brandywine's net income, total profit margin, and cash flow? c. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine's net income, total profit margin, and cash flow? d. Suppose the change had halved, rather than doubled, the firm's de- preciation expense. Now, what would be the impact on net income, total profit margin, and cash flow? 3.6 Assume that Mainline Homecare, a for-profit corporation, had exactly the same situation as reported in Problem 3.5. However, Mainline must pay taxes at a rate of 40 percent of pretax (operating) income. Assuming that the same revenues and expenses reported for financial accounting pur- poses would be reported for tax purposes, redo Problem 3.5 for Mainline

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!