HealthMart is a retail store selling home oxygen equipment. HealthMart also services home oxygen equipment, for which the company bills customers monthly. HealthMart has budgeted for increases in service revenue of $200 each month due to a recent advertising campaign. The forecast of sales and service revenue for MarchJune 2018 is as follows: @ (Click the icon to view the forecast of sales and service revenue.) 0 (Click the icon to view the collection information.) Read the @uirements. Requirement 1. Calculate the cash that HealthMart expects to collect in May and in June 2018. Show calculations for each month. Start by showing the cash collections of sales revenue, then complete the schedule by entering in the service revenue collections and the total cash collections for each month. (Complete all answer boxes. If there were no collections of revenue for a certain month, select "0%" in the "Collection %" column and enter a "0\" in the appropriate May or June column.) Gross Expected Revenue Collection % April May June Sales revenue: April sales revenue collected in Apr 8.000 x 97% = 7.760 May sales revenue collected in May 7.500 x 97% = 7.275 June sales revenue collected in June 9,000 x 97% 8,730 HealthMart is a retail store selling home oxygen equipment. HealthMart also services home oxygen equipment, for which the company bills customers monthly. HealthMart has budgeted for increases in service revenue of $200 each month due to a recent advertising campaign. The forecast of sales and service revenue for March-June 2018 is as follows: @ (Click the icon to view the forecast of sales and service revenue.) 0 (Click the icon to view the collection information.) Read the muirements. Service revenue: March service revenue collected in Apr_ 4200 X March service revenue collected in March service revenue collected in June E x : April service revenue collected in Apr. April service revenue collected in May :I x :l H i l H l EMU l April service revenue collected in June May service revenue collected in May May service revenue collected in June :I x :| June service revenue collected in June Total collections l;l mm H Data table Sales and Service Revenues Budget March-June 2018 Month Expected Sales Revenue Expected Service Revenue Total Revenue March $ 6,000 $ 4,000 $ 10,000 April 8,000 4,200 12,200 May 7,500 4,400 11,900 June 9,000 4,600 13,600More info Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into HealthMart's account overnight. For the servicing of home oxygen equipment, 60% of oxygen services billed each month is collected in the month of the service, and 40% is collected in the month following the service. Requirements 1. Calculate the cash that HealthMart expects to collect in April, May and June 2018 from sales and service revenue. Show calculations for each month. 2. HealthMart has budgeted expenditures for May of $1 1 ,000 and requires a minimum cash balance of $250 at the end of each month. It has a cash batance on May 1 of $400. a. Given your answer to requirement 1, will HealthMart need to borrow cash to cover its payments for May and maintain a minimum cash balance of $250 at the end of May? b. Assume (independently for each situation) that (1) May total revenues might also be 10% lower or that (2) total costs might be 5% higher. Under each of those two scenarios, show the total net cash for May and the amount HealthMart would have to borrow to cover its cash payments for May and maintain a minimum cash balance of $250 at the end of May. (Again, assume a balance of $400 on May 1.) 3. Why do HealthMart's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Has preparing the cash budget been helpful? Explain briey