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?This will give the implication that the Expense could reduce by $ 750, 000 hence there will be more Net Income. The new net income will be $ 2, 250, 000, hence an increased income.
Problem 4.5 Consider the following balance sheet:Best Care HMOBalance SheetJune 30, 2004(in thousands)AssetsCurrent AssetsCash and cash equivalents$ 2,737,Net premiums receivable$ 821Supplies$ 387Total current assets$3,945Net property and equipment$5,924Total assets $9,869Liabilities and Net AssetsAccounts payable—medical services$2,145Accrued expenses$ 929Notes payable $ 382Total current liabilities$3,456Long-term debt$4,295Total liabilities$7,751Net assets—unrestricted (equity)$2,118Total liabilities and net assets$9,869a.How does this balance sheet differ from the one presented in Table 4.1 for Sunnyvale?The major difference is that the one in table 4.1 shows an indicated two financial year periods which are 20013 and 2004 while this income statement has a single financial yearwhich is ended at 2004.
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- Fall '16
- Becky Melton