Provide working notes

5. Activity at the Peak Point Hospital reaches a peak in the second quarter of the year (April-June). The hospital catchment area includes a range of mountains greatly favoured by climbers. Unfortu- nately, many novice climbers cannot resist the temptation of climbing in the spring, the prime avalanche season. The lucky ones end up in the hospital's emergency wards and operating rooms, often for extended periods of time. (The unlucky ones are never found.) The hospital prepares quarterly cash budgets over the calendar year. The forecasted grants from the provincial Health department for the current year are as follows: 1st quarter $3,900,000 2nd quarter $7,500,000 3rd quarter $3,900,000 4th quarter $3,900,000 In general, two-thirds of grants are collected in the quarter that they are made and one-third in the following quarter. The opening balance of accounts receivable are expected to be collected in the first quarter. These grants account for 100% of hospital revenue. Hospital supplies costing $3,600,000 will be purchased evenly over the first quarter, none in the rest of the year. Payment will be made 30 days after purchase. Nursing salaries are $1,500,000 in the first, third, and fourth quarters, $2,500,000 in the second. Payment is made in the quarter that the cost is incurred. General hospital overhead costs are $1,000,000 in the first, third, and fourth quarters, $3,000,000 in the second quarter, including $500,000 depreciation each quarter. Pay- ment lags behind the cost by approximately one month. The hospital maintains an operating line of credit with its bank and pays interest on borrowings at an annual interest rate of 7%, payable quarterly. The hospital plans to maintain a minimum cash balance of $80,000 at all times. It will borrow in multiples of $50,000 when necessary to maintain this minimum. All borrowings are made at the beginning of the quarter where the deficiency is predicted, and any repayments will be made at the end of the quarter. The hospital plans to purchase new medical equipment in the second and fourth quarters in the amounts of $1,500,000 and $500,000, respectively. The closing balance sheet from the previous year shows a balance of cash on hand of $230,000 and accounts receivable of $1,280,000 Required Prepare a cash budget for Peak Point Hospital for the first two quarters of the current year in a recognized format. Be sure to show operating cash flow, ending cash balance before financing, amounts borrowed/repaid, interest payments, and final cash balance