Explain step by step. remove discrepancies in the ADS and ACP calculation, some are using the 365 days, some are not.

1 9/1/14 2 3 7 8 9 4 5 6 7 Rich Jackson, a recent MHA graduate, has been hired by Tarheel Rehabilitation Clinic to manage a B new prosthetic/orthotic supply division of the company. The division would sell primarily to rehab 3 patients, some of whom pay for the devices themselves and some of whom have the bill paid by a third O party insurer. Sales would be slow during the first few months, rise during the middle of the year, 1 and then level off by the end of the year. Sales estimates for the first year of operation are shown in 2 the table below (in thousands of dollars). Rich estimates that 30 percent of the division's customers will pay in the month of sale, 50 percent will pay in the month following sale, and the remaining 20 percent will pay in the second month following the sale. Calculate the division's expected: 3 4 5 - Accounts receivables (A/R) at the end of each month 6 - Total sales for each quarter of operation - Average daily sales (ADS) for each quarter of operation - Average collection period (ACP) for each quarter of operation - Aging schedules for the end of each quarter ANSWER 3 Assumed collection pattern 4 Month of sale 5 One month after sale 6 Two months after sale 7 0 1 2 8 9 Month 0 January -1 February 2 March 3 April 4 May 5 June 6 July 7 August 8 September 9 October 0 November -1 December 2 3 UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT 4 Age of account 5 0-30 days 6 30-60 days -7 60-90 days 8 Total 9 -0 1 Age of account -2 0-30 days -3 30-60 days 4 60-90 days -5 Total 6 -7 Chapter 15 -- Revenue Cycle and Current Accounts Management Mini-Case Days 31 28 31 30 31 30 31 31 30 31 30 31 Collected 0% 0% 0% Monthly Report Sales $100 A/R $0 $0 $0 $200 $300 $400 D $500 $0 $0 $0 $600 $675 $725 $0 $0 $0 $750 $750 $750 $750 $0 $0 $0 End of March A/R % $0 $0 SO $0 $0 $0 $0 SO 0.0% 0.0% 0.0% 0.0% End of September A/R % 0.0% 0.0% 0.0% 0.0% Remaining 0% 0% 0% Quarterly Report Sales ADS $0 $0 $0 $0 End of June ***** ***** $0.00 $0.00 $0.00 $0.00 % 0.0% 0.0% 0.0% 0.0% End of December % 0.0% 0.0% H 0.0% 0.0% ACP 0.0 0.0 0.0 0.0