11.1) Entries for the Warren Clinic 2012 income statement are listed below in

Alphabetical order. Reorder the data to reflect income statement format.

Bad debt expense$ 40,000

Depreciation expense90,000

General/administrative expenses70,000

Interest expense20,000

income40,000

Net income30,000

Other operating revenue10,000

Patient service revenue440,000

Purchased clinic services90,000

Salaries and benefits150,000

11.3) Consider this income statement:

Green Valley Nursing Home, Inc.

Statement of Income

Year Ended December 31, 2012

Revenue:

Resident service 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

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 presented in

Table 3.1 and Problem 3.2?

b. Why does Green Valley show a provision for income taxes while the

other two income statements did not?

c. What is Green Valley total profit margin? How does this value

compare with the values for Sunnyvale Clinic and BestCare?

d. The before-tax profit margin for Green Valley is operating income

divided by total revenues. Calculate Green Valleys before-tax profit

margin. Why may this be a better measure of expense control when

comparing an investor-owned business with a not-for-profits business?