Question

A)

What is Warren Clinic’s net operating revenue?

Calculate the net operating revenue, yourself. Entries for the Warren Clinic Income Statement

are listed below in alphabetical order. Reorder the data in the proper format.

Depreciation Expense

$90,000

General/Administration Expenses

$70,000

Interest Expense

$20,000

Investment Income

$40,000

Net Operating Revenues

$XXX

Other Revenue

$10,000

Patient Service Revenue

$440,000

Provision for Bad Debts

$40,000

Purchased Clinic Services

$90,000

Salaries and Benefits

$150,000

Total Expenses

$420,000

B)What are Warren Clinic’s total expenses? It is recommended that you calculate total expenses,yourself.

Depreciation Expense

$90,000

General/Administration Expenses

$70,000

Interest Expense

$20,000

Investment Income

$40,000

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

$150,000

Total Expenses

$XXX

C)What is Warren Clinic’snet operating income? Hint:In order to determine this you will have first have had to successfully calculated 'Net Operating Revenue' and 'Total Expenses'

Depreciation Expense

$90,000

General/Administration Expenses

$70,000

Interest Expense

$20,000

Investment Income

$40,000

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

$150,000

Total Expenses

$420,000

D)What is Warren Clinic’s net income?

Hint:In order to determine this you will have first have had to successfully calculated 'Net Operating Income' and determined what the 'Non-operating Income' portion

is.

Depreciation Expense

$90,000

General/Administration Expenses

$70,000

Interest Expense

$20,000

Investment Income

$40,000

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

$150,000

Total Expenses

$420,000

Answer 1

Income Statement
Operating Revenues
Patient Service Revenue	440000
Other Revenue	10000
Provision for Bad Debts	-40000
Net Operating revenue		410000
Operating Expenses
Purchased Clinic Services	90000
Depreciation	90000
General/Administration Expenses	70000
Salaries and Benefits	150000
Interest Expense	20000
Total Expenses		420000
Net operating Income		-10000
Investment Income		40000
Net Income		30000

1: Net operating revenue = Patient Service Revenue+ Other revenue – provision for doubtful debt = 440000+10000-40000 = $410,000

2: Total expenses = Purchased Clinic Services+ Depreciation+ General/Administration Expenses+ Salaries and Benefits+ Interest Expense

= 90000+ 90000+70000+150000+ 20000

=420,000

3: Net operating Income = 410000-420000= -10000

4: Net Income = -10000+40000 = 30000