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11.3 Consider this income statement: Green Valley Nursing Home Inc. Statement of Income, Year Ended December 31, 2016 Revenue Resident services revenue $3,163,258 Provision for bad debts (110,000) Other revenue 106,146 Total revenues $3,159,404 Expenses Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance and other 296,357 Depreciation 85,000 Interest 206.780 Total expenses $3,070,356 Operating income $ 89,048 Income tax expense - 31,167 Net income $ 57,881 a. How does this income statement differ from the ones presented in exhibits 11.1 and 11.2 and problem 11.2? b. Why does Green Valley show an income tax expense? c. What is Green Valley's total profit margin? How does this value compare with the values for Park Ridge Homecare and BestCare Health Insurer? d. The before-tax profit margin for Green Valley is operating income divided by total revenues. Calculate Green Valley's before-tax profit margin. Why might this be a better measure of expense control when comparing an investor-owned business with a not-for-profit business? Chapter 11: Reporting Profits OF-CHAPTER PROBLEMS END-OF-CHAD 1.1 Entries for the Wa exhibit in alphabetic he Warren Clinic 2016 income statement are listed in the following alphabetical order. Reorder the data to reflect income statement format. $ 90,000 Depreciation expense General/administrative expenses Interest expense Net income Nonoperating income Other operating revenue Patient service revenue Provision for bad debts Purchased clinic services Salaries and benefits 70,000 20,000 30,000 40,000 10,000 440,000 40,000 90,000 150,000 11.2 Consider the following income statement: BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenue: Healthcare premiums $26,682 Fees and other revenue 1,689 Net investment income 242 Total revenues $28,613 Benefits and expenses: Healthcare costs $ 15,154 Operating expenses: Selling expenses 3,963 General and administrative expenses 7,893 Interest expense Total benefits and expenses $27,395 Net income $ 1,218 385 Compare and contrast this income statement with the ones presented in exhib- its 11.1 and 11.2. b. What is BestCare's total margin? How can it be interpreted? 11.3 Consider this income statement: Green Valley Nursing Home Inc. Statement of Income, Year Ended December 31, 2016 Revenue Resident services revenue $3,163,258 Provision for bad debts (110,000) Other revenue 106,146 Total revenues $3,159,404 Expenses Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance and other 296,357 Depreciation 85,000 Interest 206.780 Total expenses $3,070,356 Operating income $ 89,048 Income tax expense - 31,167 Net income $ 57,881 a. How does this income statement differ from the ones presented in exhibits 11.1 and 11.2 and problem 11.2? b. Why does Green Valley show an income tax expense? c. What is Green Valley's total profit margin? How does this value compare with the values for Park Ridge Homecare and BestCare Health Insurer? d. The before-tax profit margin for Green Valley is operating income divided by total revenues. Calculate Green Valley's before-tax profit margin. Why might this be a better measure of expense control when comparing an investor-owned business with a not-for-profit business? Chapter 11: Reporting Profits OF-CHAPTER PROBLEMS END-OF-CHAD 1.1 Entries for the Wa exhibit in alphabetic he Warren Clinic 2016 income statement are listed in the following alphabetical order. Reorder the data to reflect income statement format. $ 90,000 Depreciation expense General/administrative expenses Interest expense Net income Nonoperating income Other operating revenue Patient service revenue Provision for bad debts Purchased clinic services Salaries and benefits 70,000 20,000 30,000 40,000 10,000 440,000 40,000 90,000 150,000 11.2 Consider the following income statement: BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenue: Healthcare premiums $26,682 Fees and other revenue 1,689 Net investment income 242 Total revenues $28,613 Benefits and expenses: Healthcare costs $ 15,154 Operating expenses: Selling expenses 3,963 General and administrative expenses 7,893 Interest expense Total benefits and expenses $27,395 Net income $ 1,218 385 Compare and contrast this income statement with the ones presented in exhib- its 11.1 and 11.2. b. What is BestCare's total margin? How can it be interpreted

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