11.5 Brandywine Clinic, a not-for-profit business, had revenues of $12 million in 2012. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. a). Construct Brandywine's 2012 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?
11.5 Brandywine Clinic, a not-for-profit business, had revenues of $12 million in 2012. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. a). Construct Brandywine's 2012 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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