(Hint: Assume that all expenses, except depreciation, were cash expenses.) What was the hospital's 2007 cash flow? 3.5 Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5
What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? The effect of the depreciation accounting method on the reported income in 1984 increased net income by $11.0 million or $.90 per common and common equivalent share. For future years, this change could cause profits to increase at a higher rate. 3.
This expense increased over 4 times the amount recorded in 2003. Also interest expenses doubled from 2002 to 2003. If outstanding debt increased on the Balance Sheet, this will substantiate this increase in interest expense. The income statement is important because it gives your data for management to make business decisions based on income of operations. The Net Income that is reported on the income statement is also
The cash flow is $3,000,000. The cash flow is the net income + depreciation, so 1.5m + 1.5m = 3m. 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? If the depreciation expense doubled, the income statement would be as follows: |Brandywine Income Statement | | | | |Revenue |12,000,000 | |Expenses | 9,000,000 | |Gross Profit | 3,000,000 | | | | |less |
Net profit margin= Net profit x 100 / sales revenue Profit is when a business is generating higher revenue than its total costs over a period of time. Profit= Total revenue-Total costs Profit is when a business is generating higher revenue than its total costs over a period of time. Profit= Total revenue-Total costs Capital: the money invested into a business or a business project. Capital: the money invested into a business or a business project. Cash flow: The movement of money into and out of your business; it's the cycle of cash inflows and
On 30 September 2014, one of the fixed assets was sold for £75,000 in cash. No depreciation is charged in the year of disposal for fixed assets disposed of by the company in
Does this source appear on the financial statements? 1. Looking at the historical income statements, we can see that income from operations is down, interest expense is up, interest income is down income before taxes is low. If you are anticipating a business to grow, these things should be growing, rather than declining as they are on the income statements. When looking at earnings per share, we can see that between May 2003 and August 2004 they issued more shares, probably because of their expansion.
Chapter 20, Problem 1 Firm A has $10,000 in assets entirely financed with equity. Firm B also has $10,000 in assetsbut these assets are financed by $5,000 in debt (with a 10 percent rate of interest)and $5,000 in equity. Both firms sell 10,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $12,000. (To ease the calculation, assume no income tax.)
Accelerated depreciation refers to any one of several methods by which a company, for 'financial accounting' and/or tax purposes, depreciates a fixed asset in such a way that the amount of depreciation taken each year is higher during the earlier years of an asset’s life. For financial accounting purposes, accelerated depreciation is generally used when an asset is expected to be much more productive during its early years, so that depreciation expense will more accurately represent how much of an asset’s usefulness is being used up each year. For tax purposes, accelerated depreciation provides a way of deferring corporate income taxes by reducing taxable income in current years, in exchange for increased taxable income in future years. This is a valuable tax incentive that encourages businesses to purchase new assets. For financial reporting purposes, the two most popular methods of accelerated depreciation are the declining balance method and the sum-of-the-years’ digits method.
In order to close this gap, a government will typically increase their spending which will directly increase the aggregate demand curve (since government spending creates demand for goods and services). At the same time, the government may choose to cut taxes, which will indirectly affect the aggregate