Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Budgeted Cash Collections In an effort to improve cash collection, Suburban Medical Clinic offers terms of 2/10, n/30, with a 5% discount on patient payments
Budgeted Cash Collections
In an effort to improve cash collection, Suburban Medical Clinic offers terms of 2/10, n/30, with a 5% discount on patient payments made with cash. Suburban estimates its total billings for the second calendar quarter of the year as follows: April, $200,000; May, $240,000; and June, $290,000. Historically, Suburban has had the following patient collection patterns:
Portions of Total Sales | |
---|---|
In month of sale: | |
Cash at time of sale | 25% |
On account during the discount period | 20% |
On account after the discount period | 10% |
In month following sale: | |
On account after the discount period | 25% |
In second month following sale: | |
On account after discount period | 15% |
Average portion uncollectible | 5% |
100% |
What would be Suburbans budgeted total cash collections for June?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started