South Africa Calculating of expense with regards to net income

[Dreamer78692]

Hi,

ABC Hospital reported net income for 2012 of $ 2.4 million where total revenues = $ 30 million and Depreciation expense totaled $ 1 million.

A. What were total expense for 2012

Total Expense = 30 - 2.4 + 1 = 28.6 million

B. What were the total cash expense for 2012

Cash Expense = 27.6 million

C. What was the hospital 2011 cash flow

Not sure what this means.

Help on this will be appreciated... I am just beginning accounting, so forgive me if these questions are simple.

 

[accounting nerd]

A. Depreciation expense is part of "total expense." Total expense for the year would be 27.6 million (30 - 2.4).

B. Total Cash Expense would exclude depreciation expense so it would be $26.6M (30 - 2.4 - 1).

C. Cash Flow is revenue that is collected (cash) and expenses that are paid (cash). Depreciation is only a "book expense" so this would be excluded from total expenses. Assuming that they collected all of their revenue (0 accounts receivable balance) and assuming all other expenses are cash expenses then cash flow would be:
28.6 million (30-2.4+1)