menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Net income On January 1, 20Y5, Dr. Marcie Cousins established Health-Wise Medical, a medical practice organized as a corporation. The following conversation occurred the following August between Dr. Cousins and a former medical school classmate, Dr. Avi Abu, at an American Medical Association convention in Seattle: Dr. Abu: Marcie, good to see you again. Why didn’t you call when you were in Miami? We could have had dinner together. Dr. Cousins: Actually, I never made it to Miami this year. My husband and kids went up to our Vail condo twice, but I got stuck in Jacksonville. I opened a new consulting practice this January and haven’t had any time for myself since. Dr. Abu: I heard about it … Health … something … right? Dr. Cousins: Yes, Health-Wise Medical. My husband chose the name. Dr. Abu: I’ve thought about doing something like that. Are you making any money? I mean, is it worth your time? Dr. Cousins: You wouldn’t believe it. I started by opening a bank account with $25,000, and my July bank statement has a balance of $80,000. Not bad for six months — all pure profit. Dr. Abu: Maybe I’ll try it in Miami! Let’s have breakfast together tomorrow and you can fill me in on the details. Comment on Dr. Cousins’ statement that the difference between the opening bank balance ($25,000) and the July statement balance ($80,000) is pure profit.

BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 1, Problem 5TIF
Textbook Problem
8 views

Net income

On January 1, 20Y5, Dr. Marcie Cousins established Health-Wise Medical, a medical practice organized as a corporation. The following conversation occurred the following August between Dr. Cousins and a former medical school classmate, Dr. Avi Abu, at an American Medical Association convention in Seattle:

Dr. Abu: Marcie, good to see you again. Why didn’t you call when you were in Miami? We could have had dinner together.

Dr. Cousins: Actually, I never made it to Miami this year. My husband and kids went up to our Vail condo twice, but I got stuck in Jacksonville. I opened a new consulting practice this January and haven’t had any time for myself since.

Dr. Abu: I heard about it … Health … something … right?

Dr. Cousins: Yes, Health-Wise Medical. My husband chose the name.

Dr. Abu: I’ve thought about doing something like that. Are you making any money? I mean, is it worth your time?

Dr. Cousins: You wouldn’t believe it. I started by opening a bank account with $25,000, and my July bank statement has a balance of $80,000. Not bad for six months — all pure profit.

Dr. Abu: Maybe I’ll try it in Miami! Let’s have breakfast together tomorrow and you can fill me in on the details.

Comment on Dr. Cousins’ statement that the difference between the opening bank balance ($25,000) and the July statement balance ($80,000) is pure profit.

To determine

Comment on the statement of Dr. C whether the Bank balance show pure profit.

Explanation of Solution

Net income: The bottom line of income statement which is the result of excess of earnings from operations (revenues) over the costs incurred for earning revenues (expenses) is referred to as net income.

Comment on the statement of Dr. C whether the Bank balance shows pure profit:

Dr. C considers the balance shown in the bank statement to be the profit made. However, bank balance is the mere representation cash in hand kept at the bank. The profit of the business is calculated as the overall balance realized after deducting all the expenses from the revenue generated for the given period.

The following points show that the statement made by Dr...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 1 Solutions

Financial And Managerial Accounting
Show all chapter solutions
add
Ch. 1 - Cost principle On June 25, Ritts Roofing extended...Ch. 1 - Accounting equation Be-The-One is a motivational...Ch. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Statement of stockholders equity Using the income...Ch. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Ratio of liabilities to stockholders equity The...Ch. 1 - Types of businesses The following is a list of...Ch. 1 - Professional ethics A fertilizer manufacturing...Ch. 1 - Business entity assumption Ozark Sports sells...Ch. 1 - Accounting equation The total assets and total...Ch. 1 - Accounting equation The total assets and total...Ch. 1 - Accounting equation Determine the missing amount...Ch. 1 - Accounting equation Inspirational Inc. is a...Ch. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Effect of transactions on stockholders equity...Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Net income and stockholders equity for four...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items Based on the data presented...Ch. 1 - Statement of stockholders equity Financial...Ch. 1 - Income statement Imaging Services was organized on...Ch. 1 - Missing amounts from balance sheet and income...Ch. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Financial statements We-Sell Realty was organized...Ch. 1 - Transactions On April 1 of the current year,...Ch. 1 - Financial statements The assets and liabilities of...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Transactions; financial statements On August 1,...Ch. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - PR 1-2 B Financial statements The assets and...Ch. 1 - Financial statements 1. Net income: 10,900 Jose...Ch. 1 - Transactions; financial statements 2. Net income:...Ch. 1 - Transactions; financial statements Bevs Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Compare Amazon.com to Best Buy Amazon.com, Inc....Ch. 1 - Analyze The Home Depot for three years The Home...Ch. 1 - Analyze Lowes for three years Lowes Companies,...Ch. 1 - Compare The Home Depot and Lowes Using your...Ch. 1 - Compare Papa Johns and Yum! Brands The following...Ch. 1 - Business versus personal expenses Marco Brolo is...Ch. 1 - Loan from bank Colleen Fernandez, president of...Ch. 1 - Communication There are two common causes of...Ch. 1 - Net income On January 1, 20Y5, Dr. Marcie Cousins...Ch. 1 - Transactions and financial statements for a...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
Why do economists oppose policies that restrict trade among nations?

Brief Principles of Macroeconomics (MindTap Course List)

What does the invisible hand of the marketplace do?

Essentials of Economics (MindTap Course List)

Discuss the following statement: All else equal, firms with relatively stable sales are able to carry relativel...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Explain how an increase in the price level affects the real value of money.

Principles of Macroeconomics (MindTap Course List)