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I cannot figure out the GAAP and the relevance of each GAAP that is being used to create the financial plan for Patton-Fuller Hospital. I did complete the following budget projections necessary to help answer the question

Patton-Fuller Community Hospital
Statement of Revenue and Expense
2009 to 2010 Operating Budget

Complete the Operating Budget. Assume the 2009 projections were realized. Use the 2009 budget and the 2010 budget assumptions to calculate expenses and income for 2010. The revenues have been completed for you.

2009 (Proj) 2010 Budgeted % Change From 2009 Projection 2010 Budget 2010 Operating Budget Assumptions
Revenue Based on these 2009 assumptions: a 3% overall deflation rate for prices in 2009—due to the weak economy—will continue into 2010.
Net patient revenue 459,900 3% 473,697 Patient revenue will continue to increase, but at a decreased rate, with little or no increase in patient volume, due to new managed care contracts.
Other revenue 3,082 15% 3,544 Marketing's plan to increase donations by 15%
Total revenue 462,982 3% 477,241

2009 (Proj) 2010 Budgeted % Change From 2009 Projection 2010 Budget 2010 Operating Budget Assumptions
Salaries and benefits 220,752 1% 222,960 Salaries will hold to a 1% overall increase in cost due to price deflation nationwide, with no increase in labor hours, due to no increase in patient volume. This assumption could be affected by a board decision either to raise nursing wages by $1 per hour or to increase the nursing hour ratio.
Supplies 74,584 -3% 72,347 Supplies cost will decrease 3% due to the price deflation and our current over-stock purchased last year.
Physician and professional fees 110,376 3% 113,687 Contracts for fees have a built-in 3% increase.
Utilities 1,200 5% 1,260 Utilities cost will increase to the rising cost of oil partially offset by the efficiency of the hospital's new heating and cooling systems.
Other 1,840 0% 1,840 No net change in the cost or volume of these items.
Depreciation & amortization (noncash expenses) 36,036 0% 36.036 Some high-cost equipment—air conditioning, telephone system, all patient beds, and headwalls—were replaced in 2009, and depreciation rose sharply. Depreciation will remain at this level in 2010.
Interest 3,708 30% 4,820 The repayment plan for any monies borrowed in 2009 will come due in 2010, with a sharp increase in interest cost.
Provision for doubtful accounts 13,797 10% 15,177 The renegotiation of managed care plans has delayed collection and made collections less certain.
Total expenses 462,293 1% 468,127 Total expenses will rise 1%

2009 (Proj) 2010 Budgeted % Change From 2009 Projection 2010 Budget 2010 Operating Budget Assumptions
Operating income 689 -33% 459 Operating Income will improve, with the hospital's loss reduced by 2/3.
Loss (nonoperating income)
Investment income (62) 0% (62) The market is down, expected to hold steady; a zero-return is expected, with neither losses nor gains.
Net income 627 -37% 397 The hospital will continue its dramatic turnaround, taking advantage of the stagnation in patient volume, price deflation, the efficiency of new equipment, and the improved arrangements with the managed care companies.

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