3.9 Integrated Physicians & Associates, an investor-owned company, had the following general ledger account balances at the end of 2020:

Gross patient service revenue (total charges) $ 975,000

Contractual discounts and allowances to third-party payers $250,000

Charges for charity (indigent) care $100,000

Estimated provision of bad debts $50,000

a. construct the revenue section of Integrated Physicians & Associates income statement for the year ended December 31, 2020.

b. Suppose the 2020 contractual discounts and allowances balance reported above is understated by $50,000. In other words, the correct balance should be $300,000. Assuming a 40 percent income tax rate, what would be the effect of the misstatement on Integrated Physicians & Associates 2020 reported:

1. Net patient service revenue?

2. Total expenses, including income tax expense?

3. Net income?