Budgeting Purchases, Revenues, Expenses, and Cash in a Service Organization Wauconda Medical Center is located in a summer resort community. During the summer months (June through August), the center operates an outpatient clinic for the treatment of minor injuries and illnesses. The clinic is administered as a 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 outpatient clinic reveals the following: Staff: Seven full-time employees with total monthly salaries of $42,000. On a monthly basis, one additional staff member is hired for every 500 budgeted patient visits in excess of 3,000, at a cost of $7,000 per month. Facilities: Monthly facility costs, including depreciation of $2,500, total $15,000. Supplies: The supplies expense averages $20 per patient visit. The center maintains an end-of month supplies inventory equal to 10% of the predicted needs of the following month, with a minimum ending inventory of $4,000, which is also the desired inventory at the end of August. Additional variable patient costs, such as medications, are charged directly to the patient by the hospital pharmacy. Payments: All staff and maintenance expenses are paid in the month the cost is incurred. 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. Collections: The average bill for services rendered is $75. Of the total bills, 40% are paid in cash at the time the service is rendered, 10% are never paid, and the remaining 50% are covered by insurance. In the past, insurance companies have disallowed 30% of the claims filed and paid the balance two months after services are rendered. May 30 status: At the end of May, the clinic had $15,000 in cash and supplies costing $5,000. Budgeted patient visits for next summer are as follows:

Month	Patient Visits
June	3,000
July	3,500
August	4,500

Required For the Wauconda Outpatient Clinic: a. Prepare a supplies purchases budget for June, July, and August with a total column. Note: Do not use any negative signs with your answers.

Wauconda Medical Center Outpatient Clinic Supplies Purchases Budget For June, July, and August June July August Total Required for patient visits $ 60000 V $ 70000 V 90000 220000 Desired ending inventory 7000 9000 4000 4000 Total requirements 67000 79000 94000 224000 Less beginning inventory 5000 V 7000 9000 5000 Purchases 62000 VS 72000 VS 85000 219000