Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bentfield Health Center Combined Cash Budget For the Months of July through September July Beginning balance of cash Plus: Cash collections Total cash available Less:

image text in transcribed
image text in transcribed
Bentfield Health Center Combined Cash Budget For the Months of July through September July Beginning balance of cash Plus: Cash collections Total cash available Less: Cash payments Ending cash balance before financing Financing Plus New borrowings Loss Debt repayments Less Interest payments Ending cash balance ti a. Cash collections from services in July, August, and September, are projected to be 591,000, $151,000, and 5124,000 respectively b. Cash payments for the upcoming third quarter are projected to be $142,000 in July, 5103,000 in August, and $133,000 in September c. The cash balance as of the first day of the third quarter is projected to be $31,000 d. The health center has a policy that it must maintain a minimum cash balance of $25,000 The health center has a line of credit with the local bank that allows it to borrow funds in months that it would not otherwise have its minimum balance. If the company has more than its minimum balance at the end of any given month, it uses the excess funds to pay off any outstanding line of credit balance. Each month, Bentfield Health Center pays interest on the prior month's line of credit ending balance The actual interest rate that the health center will pay floats since it is tied to the prime rate. However, the interest rate paid during the budget period is expected to be 2% of the prior month's line of credit ending balance (if the company did not have an outstanding balance at the end of the prior month, then the health center does not have to pay any interest) All line of credit borrowings are taken or paid off on the first day of the month. As of the first day of the third quarter, Bentfield Health Center did not have a balance on its line of credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Equity Markets

Authors: Philip Brown

1st Edition

1138617083, 978-1138617087

More Books

Students also viewed these Accounting questions

Question

5. Identify three characteristics of the dialectical approach.

Answered: 1 week ago

Question

6. Explain the strengths of a dialectical approach.

Answered: 1 week ago

Question

4. Explain the strengths and weaknesses of each approach.

Answered: 1 week ago