Brandywine Homecare, a not-for-profit business, had revenues of $12 .pdf

Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expenses
other than depreciation totaled 75% of revenues, and depreciation expense was $1.5 million. All
revenues were collected in cash during the year and all expenses other that depreciation were
paid in cash. a. Construct Brandywine\'s 2011 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? d. Suppose the change had halved, rather than doubled, the firm\'s depreciation expense.
Now, what would be the impact on net income, total profit margin and cash flow?
Solution