BetCare HMO

Statement of Operations

Year Ended June 30,2011

Revenue:

Premiums earned $26,682

Coinsurance 41,689

Interest and other income 242

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Total Revenues $28,613

Expenses:

Salaires :

Salaries and benefits $15,154

Medical supplies and drugs $7,507

Insurance $3,963

Provision for bad debts $ 19

Depreciation $ 367

Interest $ 385

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Total Expenses $27,395

Net Income $ 1,218

a)How does this income statement differ from the one presented in Exibit 3.1?

b)Did BestCare $367,000 on New fixed assets during fiscal year 2011?If not ,what is the economic rationale behind its reported depreciation expense?

c)Explain the provision for bad debts entry?

d)What's is BestCare's total profit margin ?How can it be interpreted?