Math problems

PROBLEMS – Solve the following. Show your work (a simple answer that is wrong earns zero points, and a right answer without back up work may not earn full points)! 1. (49 Points) Intensive Care Urology Practice (ICUP), a not-for-profit business, had

revenues in 2020 of $900,000. Cash Expenses are $600,000, plus depreciation of $100,000. All revenues were collected in cash, and all expenses, excluding depreciation, were paid in cash during the year. No other assets were purchased, and no money was borrowed.

a. Construct ICUP’s Income Statement.

Net Income $

b. What was ICUP’s Cash Flow for the year? Cash Flow $

c. If PU changed its depreciation method so that the Depreciation Expense tripled to $300,000, what would be the new Net Income (other expenses remained the same)?

Net Income $

d. Again, if (under GAAP) ICUP changed its depreciation method so that the Depreciation Expense tripled to $300,000, what would be the new Cash Flow?

Cash Flow $

e. Comment on the results.

2. (24 Points) Jaws Dental (JD) had an Equity balance at the beginning of the year of $800,000 and an Equity balance of $600,000 at the end of the year.

a. Assume JD is a not-for profit. What was JD’s Net Income (Loss) for the

year? ANSWER $

b. Now assume that JD is a for-profit. If they paid $500,000 in dividends, what was JD’s Net Income (Loss) for the year?

ANSWER $

3. (45 Points) The following are account balances on December 31, 2020 for Intensive Care

Urology Practice (ICUP), (in alphabetical order): Accounts Payable $400,000 Accounts Receivable, Net $310,000 Cash $180,000 Equity (January 1, 2020) $680,000 Expenses $670,000 Inventory $530,000 Long-term Debt $700,000 Long-term Investments $170,000 Net Property & Equipment $820,000 Revenues $900,000 Create ICUP’s Balance Sheet (Hint: Not all of the accounts above are balance sheet accounts - you may need to calculate ICUP’s income!).