Budgeting Purchases, Revenues, Expenses, and Cash in a Service Organization Round Lake Medical Center is located in a summer resort community. During the summer months the center operates an outpatient clinic for the treatment of minor injuries and illnesses. The clinic is administered as separate department within the hospital. It has its own staff and maintains its own financial records. All patients requiring extensive or intensive care are referred to other hospital departments. An analysis of past operating data for the out-patient clinic reveals the following: bullet Staff: Seven- full-time employees with total monthly salaries of $42,000. On monthly basis, one additional staff member is hired for every 500 budgeted patient visits in excess of 3,000, at a cost of $4,000 per month. Bullet Facilities: Monthly facility costs, including depreciation of $2,000, total $8,000. Bullet Supplies: The supplies expense averages $10 per patient visit. The center maintains an end-of-month supplies inventory equal to ten percent of the predicted needs of the following month, with a minimum ending inventory of $3,000, which is also the desired inventory at the end of August. bullet Additional variable patient costs, such as medications, are charged directly to the patient by the hospital pharmacy. bullet Payments: All staff and maintenance expenses are paid in the month the cost is incurrent. Supplies are purchased at cost directly from the hospital with an immediate transfer of cash from the clinic cash account to the hospital cash account. bullet Collections: The average bill for services rendered is $60, Of the total bills, 40 percent are paid in cash at the time the service is rendered, 10 percent are never paid, and the remaining 50 percent are covered by insurance. In the past, insurance companies have disallowed 20 percent of the claims filed and paid the balance two months after services are rendered bullet May 30 status: At the end of May, the clinic had $12,000 in cash and supplies costing $3,000. Budgeted patient visits for next summer are as follows: Required For the Round Lake Outpatient Clinic: Prepare a supplies purchases budget for June, July, and August, with a total column. Prepare a revenue and expense budget for June, July, and August with a total column. Prepare a cash budget for June, July and August with a total column. Explain why you were unable to develop a feasible cash budget and make any appropriate recommendations for management's consideration. Developing a Master Budget for a Merchandising Organization Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2014