Johnson family care Inc. is a large ambulatory care center that provides comprehensive 24-hour primary and specialty care to a large suburban population in Pennsylvania. The center purchases new clinical laboratory equipment for $ 1.1 million and spent $22,000 to renovate a center room to accommodate the new equipment. The useful life of the equipment is estimated to be 10 years, after which it can be sold for $75,000. Johnson uses a straight-line method to calculate book depreciation.
a. What annual depreciation expense will be reported on the income statement for the center?
b. What annual depreciation will be included in calculating cash flows
c. What impact does depreciation has on net income?
d. What impact if any does depreciation has on the organization tax bill?
e. What would be the capital gain if JFC sells the machine for $85,000 at the end of its useful life.
Assuming JFC is in a 40% tax bracket. How much would it have to send to IRS?
a. Total fixed cost for the clinic is $20,000 per month. The clinic received 2000 patients for the second quarter. What was the per unit fixed cost for the second quarter?
b. What was the total variable costs for the quarter if each supply kit used cost $ 15.00 each?
c. Based on information above, compute total costs for the quarter