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3 . 5 Brandywine Homecare, a not - for - profit business, had revenues of $ 1 2 million in 2 0 1 5 .
Brandywine Homecare, a notforprofit business, had revenues of $
million in Expenses other than depreciation totaled percent
of revenues, and depreciation expense was $ million. All revenues
were collected in cash during the year, and all expenses other than
depreciation were paid in cash.
a Construct Brandywine's 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
depreciation expense. Now, what would be the impact on net
income, total profit margin, and cash flow?
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