Question

The following are account balances (in thousands) for Lima Health Plan. Prepare an income statement for...

The following are account balances (in thousands) for Lima Health Plan. Prepare an income statement for the year ended December 21,20X0. (Hint: you must recognize which account balances qualify for the income statement). You will enter summary balances for total revenues Blank 1; total expenses Blank 2;operating income Blank 3; net income Blank 4.

Givens (in '000s):

Income tax Benefit of operating loss

$8,000

Net property and equipment

$2,000

Physician services expense

$164,000

Premium revenue

$125,000

Marketing expense

$11,000

Compensation expense

$13,000

Interest income and other revenue

$6,000

Outside referral expense

$4,000

Medicare revenue

$131,000

Occupancy and depreciation expense

$2,000

Medical claims payable

$37,000

Accounts receivable

$3,000

Emergency room expense

$14,000

Inpatient services expense

$101,000

Interest expense

$2,000

Medicaid revenue

$35,000

Owners' equity

$61,500

Cash & cash equivalents

$97,000

Long-term debt

$3,500

Other administrative expense

$2,000

Homework Answers

Answer #1

Solution:

Income Statement - Lima Health Plan for year ended December 31, 20X0
Particulars Amount
Revenue:
Premium Revenue $125,000.00
Medicare Revenue $131,000.00
Medicaid Revenue $35,000.00
Total Revenue (A) $291,000.00
Expenses:
Physician service expense $164,000.00
Marketing Expense $11,000.00
Compensation Expense $13,000.00
Outside Referral Expense $4,000.00
Occupancy and Depreciation Expense $2,000.00
Emergency Room Expense $14,000.00
Impatient Services expense $101,000.00
Other administratvie expense $2,000.00
Total Expense (B) $311,000.00
Operating Income ( C ) (A-B) -$20,000.00
Add: Interest & Other Revenue $6,000.00
Add: Income tax benefit of operating loss $8,000.00
Less: Interest Expense -$2,000.00
Net Income

-$8,000.00

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