The nominal accounts of Boston Clinic for the year ended December 2018 are listed below in...

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The nominal accounts of Boston Clinic for the year ended December 2018 are listed below in...

The nominal accounts of Boston Clinic for the year ended December 2018 are listed below in alphabetical order:

Depreciation expense	$90,000
General/administrative expenses	70,000
Interest expense	20,000
Investment income	40,000
Net income	30,000
Net operating revenues	410,000
Other revenue	10,000
Patient service revenue	440,000
Provision for bad debts	40,000
Purchased clinic services	90,000
Salaries and benefits	170,000

a. Prepare a properly formatted income statement for the year ended December 31, 2018.

b. Did Boston Clinic spend $90,000 on new fixed assets during fiscal year 2018? If not, what is the economic rationale behind its reported depreciation expense?

c. What is Boston Clinic’s total profit margin?

d. How can the calculated profit margin (see part c) be interpreted?

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Answer 1

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CA oston clinic ncome state ment for heHear ended Dee zy 201R oher Revenue Revenue,-D 4umeo TO tol Expengee De príciation erp Boston linic did noh boughony neo ed assest but the Depricatien expenses is he eneral usear and tear of already enisted red a

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