Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

( i ) ( Click the icon to view the expected transactions. ) Requirement not enter a zero. Use parentheses or a minus sign for

(i)(Click the icon to view the expected transactions.)
Requirement
not enter a zero. Use parentheses or a minus sign for negative ending cash balances.)
St. Germaine Health Center
Combined Cash Budget
For the Months of July through Septs
Beginning balance of cash
Plus: Cash collections
Total cash available
Less: Cash payments
Ending cash balance before financing
Financing:
Plus: New borrowings
Less: Debt repayments
Less: Interest payments
Ending cash balance
More info
a. Cash collections from services in July, August, and September, are projected to be $93,000,$159,000, and $123,000
respectively.
b. Cash payments for the upcoming third quarter are projected to be $140,000 in July, $109,000 in August, and $139,000 in
September.
c. The cash balance as of the first day of the third quarter is projected to be $37,000.
d. The health center has a policy that it must maintain a minimum cash balance of $28,000.
The health center has a line of credit with the local bank that allows it to borrow funds in months that it would not otherwise
have its minimum balance. If the company has more than its minimum balance at the end of any given month, it uses the
excess funds to pay off any outstanding line of credit balance. Each month, St. Germaine Health Center pays interest on the
prior month's line of credit ending balance. The actual interest rate that the health center will pay floats since it is tied to the
prime rate. However, the interest paid during the budget period is expected to be 1% of the prior month's line of credit ending
balance (if the company did not have an outstanding balance at the end of the prior month, then the health center does not
have to pay any interest). All line of credit borrowings are taken by the end of the month (when the the cash balance has not
met its minimum balance), or paid off by the end of the month (when the cash balance is sufficient). As of the first day of the
third quarter, St. Germaine Health Center did not have a balance on its line of credit.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Telecom Audit

Authors: M S. Mastel

1st Edition

0071410546, 9780071410540

More Books

Students also viewed these Accounting questions

Question

=+b) Are the conditions for ANOVA met? Why or why not?

Answered: 1 week ago

Question

When should you avoid using exhaust brake select all that apply

Answered: 1 week ago