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Modern Healthcare, a group practice clinic with 10 physicians, had the following income in 2011
The following changes are expected in 2012:
1. The clinic is expecting a 5 percent decline in revenues because of increasing pressure from insurance companies.2. Physicians are planning to hire a physician assistant at a salary of $80,000 per year.3. Training costs are expected to increase by $20,000.4. Supplies are expected to increase to 9 percent of revenue.5. Phone, fax, and insurance amounts will stay the same.6. Depreciation expense will increase by $25,000 per year, since the clinic is planning to purchase equipment for $125,000.7. Utilities and miscellaneous expenses are expected to increase by 5 percent next year.8. Taxes on income will be 35 percent.
Required:
Prepare a budgeted income statement for Modern Healthcare for the year 2012.
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