Healthcare site X provided the following info. Put together a cash budget for qu
ID: 2453247 • Letter: H
Question
Healthcare site X provided the following info. Put together a cash budget for quarter ending Dec 2010 and for the months Oct through Dec 2010.
a. Revenues:
Actual Patient
Revenues 2010
Projected Patient
Revenues 2010
Projected Patient
Revenues 2011
Jul.
$1,400,000
Oct.
$1,500,000
Jan.
$1,700,000
Aug.
$1,500,000
Nov.
$1,600,000
Feb.
$1,300,000
Sept.
$1,300,000
Dec.
$1,700,000
Mar.
$1,200,000
b. Patient Revenues are collected as follows:
60%
month of service
30%
1 month after service
10%
2 months after service
c. “Other revenues” include all other revenues including interest earned and are forecasted to be as follows:
October
$44,000
November
$55,000
December
$52,000
d. Projected cash outflows
October
$1,199,000
November
$1,263,800
December
$1,390,600
January
$855,000
e. Ending cash balance for Sept was $200,000.
f. Healthcare site X requires a month-end cash balance equal to 40% of the following month’s forecasted cash outflows.
Actual Patient
Revenues 2010
Projected Patient
Revenues 2010
Projected Patient
Revenues 2011
Jul.
$1,400,000
Oct.
$1,500,000
Jan.
$1,700,000
Aug.
$1,500,000
Nov.
$1,600,000
Feb.
$1,300,000
Sept.
$1,300,000
Dec.
$1,700,000
Mar.
$1,200,000
Explanation / Answer
Amount in $
November
Amount in $
December
S No Particulars Amount in $ OctoberAmount in $
November
Amount in $
December
A Opening Cash Balance 200,000 (20,520) (245,560) B Cash Inflow (a) Sales 60% Month of Services 900,000 960,000 1,020,000 30% 1month after services 390,000 450,000 480,000 10% 2month after services 150,000 130,000 150,000 (b) Other Revenues 44,000 55,000 52,000 (C) Cash Outflow 1,199,000 1,263,800 1,390,600 (D) Required Balance during the month 505,520 556,240 342,000 (40% 0f following month's Balance) (E) Closing Cash Balance(A+B-C-D) (20,520) (245,560) (276,160)Related Questions
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