Dynatech Healthcare, a group practice clinic with 10 physicians, had the following income in 2017:

Revenue $3,300,000

Less operating expenses:

Salaries

Physicians $1,360,000

Nurses 146,000

Nursing aide 63,500

Receptionist 54,000

Accounting services 40,000

Training 125,000

Supplies 259,000

Phone and fax 3,700

Insurance 301,000

Depreciation 242,000

Utilities 20,400

Miscellaneous 72,000

Total operating expenses 2,686,600

Income before taxes 613,400

Less taxes on income 214,690

Net income $398,710

The following changes are expected in 2018:

1. The clinic is expecting a 2 percent decline in revenues because of increasing pressure from insurance companies.

2. Physicians are planning to hire a physician assistant at a salary of $47,000 per year.

3. Training costs are expected to increase by $15,000.

4. Supplies are expected to increase to be 10 percent of revenue.

5. Phone, fax, accounting services and insurance amounts will stay the same.

6. Depreciation expense will increase by $21,000 per year, since the clinic is planning to purchase equipment for $125,000.

7. Utilities and miscellaneous expenses are expected to increase by 5 percent next year.

8. Taxes on income will be 35 percent.

Prepare a budgeted income statement for Dynatech Healthcare for the year 2018. (Round answers to 0 decimal places, e.g. 125.)

Dynatech Healthcare

Budgeted Income Statement

December 31, 2018For the Year Ended December 31, 2018For the Quarter Ended December 31, 2018

MiscellaneousTotal operating expensesAccounting servicesIncome before taxesSalaries of NursesOperating expensesSuppliesUtilitiesTaxes on incomeNet income/(loss)Depreciation on office and equipmentRevenueSalaries of ReceptionistInsuranceSalaries of PhysiciansSalaries of Physician assistantSalaries of Nursing aidTrainingPhone and fax $

AddLess

:

UtilitiesTotal operating expensesSalaries of Nursing aidRevenueInsuranceSalaries of Physician assistantNet income/(loss)Income before taxesPhone and faxSalaries of ReceptionistAccounting servicesTrainingSuppliesSalaries of PhysiciansDepreciation on office and equipmentOperating expensesMiscellaneousTaxes on incomeSalaries of Nurses

Miscellaneous Income before taxes Salaries of Receptionist Revenue Total operating expenses Salaries of Physician assistant Phone and fax Salaries of Nursing aid Training Depreciation on office and equipment Utilities Salaries of Nurses Insurance Taxes on income Supplies Net income/(loss) Operating expenses Accounting services Salaries of Physicians

Salaries of Receptionist Phone and fax Insurance Supplies Taxes on income Depreciation on office and equipment Income before taxes Miscellaneous Net income/(loss) Revenue Salaries of Physicians Total operating expenses Operating expenses Accounting services Salaries of Physician assistant Salaries of Nurses Training Utilities Salaries of Nursing aid

Salaries of Nurses Miscellaneous Training Insurance Salaries of Receptionist Utilities Phone and fax Salaries of Physician assistant Depreciation on office and equipment Supplies Total operating expenses Income before taxes Salaries of Nursing aid Taxes on income Accounting services Net income/(loss) Revenue Operating expenses Salaries of Physicians

Supplies Salaries of Physicians Salaries of Nurses Phone and fax Miscellaneous Salaries of Physician assistant Operating expenses Training Taxes on income Revenue Accounting services Salaries of Nursing aid Insurance Income before taxes Total operating expenses Depreciation on office and equipment Salaries of Receptionist Utilities Net income/(loss)

Salaries of Receptionist Salaries of Physician assistant Total operating expenses Taxes on income Depreciation on office and equipment Income before taxes Miscellaneous Phone and fax Training Utilities Net income/(loss) Revenue Operating expenses Salaries of Nursing aid Accounting services Salaries of Nurses Supplies Insurance Salaries of Physicians

Salaries of Physician assistant Salaries of Physicians Income before taxes Salaries of Receptionist Accounting services Operating expenses Miscellaneous Utilities Total operating expenses Taxes on income Insurance Depreciation on office and equipment Supplies Net income/(loss) Salaries of Nurses Revenue Salaries of Nursing aid Training Phone and fax

Training Supplies Taxes on income Salaries of Physician assistant Phone and fax Income before taxes Insurance Depreciation on office and equipment Net income/(loss) Salaries of Receptionist Revenue Salaries of Nurses Utilities Salaries of Physicians Salaries of Nursing aid Accounting services Operating expenses Miscellaneous Total operating expenses

Supplies Accounting services Depreciation on office and equipment Salaries of Nursing aid Net income/(loss) Revenue Taxes on income Utilities Total operating expenses Training Miscellaneous Income before taxes Operating expenses Salaries of Nurses Salaries of Physicians Salaries of Physician assistant Phone and fax Insurance Salaries of Receptionist

Net income/(loss) Salaries of Nurses Training Revenue Utilities Operating expenses Accounting services Salaries of Receptionist Salaries of Physicians Income before taxes Salaries of Physician assistant Miscellaneous Depreciation on office and equipment Salaries of Nursing aid Total operating expenses Taxes on income Supplies Phone and fax Insurance

Salaries of Physicians Training Accounting services Depreciation on office and equipment Utilities Salaries of Physician assistant Insurance Net income/(loss) Revenue Miscellaneous Salaries of Nurses Salaries of Nursing aid Salaries of Receptionist Income before taxes Operating expenses Taxes on income Supplies Phone and fax Total operating expenses

Income before taxes Salaries of Nurses Accounting services Taxes on income Revenue Training Utilities Salaries of Physicians Salaries of Physician assistant Supplies Phone and fax Miscellaneous Total operating expenses Operating expenses Insurance Net income/(loss) Salaries of Nursing aid Salaries of Receptionist Depreciation on office and equipment

Supplies Phone and fax Training Net income/(loss) Salaries of Receptionist Salaries of Nurses Total operating expenses Salaries of Physicians Utilities Insurance Income before taxes Operating expenses Accounting services Miscellaneous Depreciation on office and equipment Taxes on income Revenue Salaries of Nursing aid Salaries of Physician assistant

Total operating expenses Revenue Operating expenses Salaries of Physician assistant Taxes on income Net income/(loss) Depreciation on office and equipment Utilities Miscellaneous Salaries of Physicians Income before taxes Supplies Phone and fax Salaries of Nurses Salaries of Nursing aid Accounting services Salaries of Receptionist Training Insurance

Operating expenses Revenue Total operating expenses Utilities Salaries of Physicians Phone and fax Salaries of Physician assistant Salaries of Nurses Miscellaneous Salaries of Nursing aid Salaries of Receptionist Income before taxes Taxes on income Insurance Accounting services Net income/(loss) Training Supplies Depreciation on office and equipment

MiscellaneousUtilitiesPhone and faxSalaries of PhysiciansTrainingDepreciation on office and equipmentIncome before taxesSalaries of ReceptionistAccounting servicesTaxes on incomeTotal operating expensesSalaries of NursesNet income/(loss)Salaries of Nursing aidSuppliesInsuranceOperating expensesSalaries of Physician assistantRevenue

LessAdd

:

Total operating expensesIncome before taxesSalaries of NursesUtilitiesTrainingSuppliesMiscellaneousPhone and faxSalaries of Nursing aidDepreciation on office and equipmentAccounting servicesTaxes on incomeNet income/(loss)Salaries of ReceptionistInsuranceRevenueOperating expensesSalaries of PhysiciansSalaries of Physician assistant

Salaries of PhysiciansSalaries of ReceptionistSalaries of Physician assistantSalaries of NursesIncome before taxesTotal operating expensesTaxes on incomeNet income/(loss)RevenueMiscellaneousDepreciation on office and equipmentSalaries of Nursing aidUtilitiesOperating expensesAccounting servicesTrainingInsuranceSuppliesPhone and fax $