Rio Grande Nursing Home Inc.

Statement of Income

Year Ended December 31, 2020

Revenue

Resident services revenue $3,520,400

Provision for bad debts (120,300)

Other revenue 150,600

Total revenues $3,550,700

Expenses

Salaries and benefits $1,630,250

Medical supplies and drugs 990,780

Insurance and other 324,622

Depreciation 94,600

Interest 160,460

Total expenses $3.200,712____

Operating income $ 349,988

Income tax expense 120,190____

Net income $ 229,798

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a. How does this income statement differ from the one presented in exhibit 11.2?

b. What is Rio Grandes total profit margin?

c. How do you interpret and assess Rio Grandes total profit margin? Use exhibit 11.1, 2016 as the benchmark for the assessment.