Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Iowa Diagnostic Center's projected Patient Revenues for the first six months of 2013 are given below: Jan. $200,000 April $400,000 Feb. $240,000 May $320,000 Mar.

Iowa Diagnostic Center's projected Patient Revenues for the first six months of 2013 are given below: Jan. $200,000 April $400,000 Feb. $240,000 May $320,000 Mar. $280,000 June $320,000 25% of patient revenues are collected in cash at time service is provided, 50% are collected in the month following provision of service, and the remaining 25% are collected in the second month following provision of the service. Payroll expenses are 75% of that month's revenues. Total other estimated expenses are $60,000/month. The company's cash balance as of February 28, 2013 will be $40,000. Excess cash will be used to retire short term borrowing (if any). Iowa Diagnostic will have no short term borrowing as of February 28, 2013. Assume that the interest rate on short term borrowing is 1% per month. The company must have a minimum cash balance of $25,000 at the beginning of each month. Round all answers to the nearest $100

Based on the information in Table 5-1, what will be Iowa Diagnostic Center's ending cash balance (before borrowing) in March? (Do not include commas in answer)

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

The Evolution Of Finance

Authors: Barbara Guth

1st Edition

1633377261, 978-1633377264

More Books

Students also viewed these Finance questions

Question

What are some important provisions of the Fair Labor Standards Act?

Answered: 1 week ago

Question

2. LO6-2 Prepare a cash flow statement and a budget.

Answered: 1 week ago