The Financial Statements provided by Jackson and Associates and the Financial Statements provided by PMI use different accounting methods (cash vs. accrual) and are, therefore, not compatible.

Required

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

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

beginning account balances.

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

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International Research Journal of Applied Finance ISSN 2229 - 6891 May, 2012 Case Study Series Exhibit 8 - Income Statement for Year Ended December 31, 2011 (Prepared by PMI) Sunset Medical, P.C. Income Statements For Year Ended December 31, 2011 Revenues Medical Revenues Expenses Direct Expenses*** General Expenses] Interest Expense Depreciation Expense Total Expenses Net Operating Income Other Income Other Expense Total Other Income (Expense). Net Income $ 719,880.70 $ 567,372.88 $ 16,690.68 $ 34,147.56 $ 4,261.93 $ (36,050.84) $1,601,050.52 $1,338,091.82 262.958.70 $ $ (31,788.91) $ 231,169.79 International Research Journal of Applied Finance ISSN 2229 - 6891 May, 2012 Case Study Series Exhibit 8 - Income Statement for Year Ended December 31, 2011 (Prepared by PMI) Sunset Medical, P.C. Income Statements For Year Ended December 31, 2011 Revenues Medical Revenues Expenses Direct Expenses*** General Expenses] Interest Expense Depreciation Expense Total Expenses Net Operating Income Other Income Other Expense Total Other Income (Expense). Net Income $ 719,880.70 $ 567,372.88 $ 16,690.68 $ 34,147.56 $ 4,261.93 $ (36,050.84) $1,601,050.52 $1,338,091.82 262.958.70 $ $ (31,788.91) $ 231,169.79

Answer rating: 100% (QA)

a Recompute the Income Statement and Balance Sheet provided by PMI on December 31 2011 to make the two years comparable Adjusted Income Statement for ... View the full answer