Question
Medifast Health is in the process of preparing a cash budget for December. Medifast had the following results for the past 3 months: Month Net
Medifast Health is in the process of preparing a cash budget for December. Medifast had the following results for the past 3 months:
Month | Net patient service revenue |
September | $350,000 |
October | $420,000 |
November | $380,000 |
Assume Medifast has no uncollectible accounts. Medifast collects 70 percent of revenue in the same month. It collects 20 percent in the next month. And, it collects 10 percent in the next month after that. In December, Medifast is expecting $300,000 in net patient service revenue. If Medifast expects the same pattern of cash collections as in previous months, what should be budgeted for total cash collections in December in Medifasts cash budget?
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