Explain the provision for bad debts

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Reference no: EM131222368

Consider the following income statement

bestcare HMO statement of operations Year ended june 30,2011 ( in thousands)

Revenue
premiums earned 26,682
coinsurance 1,689
interest and other income 242
total revenues 28,613

Expenses
salaries and benefits 15,154
medical supplies and drugs 7,507
insurance 3,963
provision for bad debts 19
depreciation 367
interest 385
total expenses 27,395
net income 1,218

a.) how does this income statement differ from the one presented in exhibit 3.1?

b)did the best care spend 367,000 on new fixed assets during fiscal year 2011?? If not, what is the total economic rationale behind its reported depreciation expense?

c) explain the provision for bad debts.

Reference no: EM131222368

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