Cash Budgeting—Hospital The management of Table Rock Memorial Hospital needs to prepare a cash budget for July 2009. The following information is available:

a. The cash balance on July 1, 2009, is $245,000.

b. Actual services performed during May and June and projected services for July are:

Credit sales are collected over a 2-month period, with 60% collected during the month the service is performed and 40% in the following month.

c. Hospital personnel plan to purchase $70,000 of supplies during July on account.
Accounts payable are usually paid one-half in the month of purchase and one-half in the following month. The accounts payable balance on July 1, 2009, is $30,000.

d. Salaries and wages paid during July will be approximately $650,000. (Ignore income and other tax withholdings.)

e. Depreciation on the hospital and equipment for July will be $120,000.

f. A short-term bank loan of $90,000 (including interest) will be repaid in July.
g. All other cash expenses for July will total $86,000.
Prepare the hospital’s July cash budget.

Transcribed Image Text:

May June July Cash services (bills paid by individuals as they leave the hospital) Credit services (bills paid by insurance companies and Medicare) $115,000 $ 98,000 $115,000 950,000 1,075,000 950,000