Question

Alderman Health Center provides a variety of medical services. The company is preparing its cash budget for the upcoming third quarter. The following transactions are expected to occur (Click the icon to view the expected transactions.) Requirement Prepare a combined cash budget for Alderman Health Center for the third quarter, with a column for each month and for the quarter total (a box is not used in the table leave the box empty, do not enter a zero Use parentheses or a minus sign for negative ending cash balances.) For the Months of July through Septemba More info July 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 Loss Interest payments a. Cash collections from services in July August, and September, are projected to be $97,000 $154.000, and $123,000 respectively b. Cash payments for the upcoming Third quarter are projected to be $148,000 in July $106,000 in August, and $133,000 in September c. The cash balance as of the frst day of the third quarter is projected to be $36.000 d. The health center has a policy that it must maintain a minimum cash balance of $20,000 The health center has a ine 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, Alderman Health Center pays interest on the prior month's line of credit onding 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 of 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 or paid off on the first day of the month. As of the first day of the third quarter, Alderman Health Center did not have a balance on its line of credit Ending cash balance Enter any number in the edit fields and then click Check Answer. Print Done A parte

Answer 1

X B4 A B D E F G 1 Alderman Health Center 2 Cash Budget for the third quarter September 4 July August Quarter beginning balance of cash plus: cash collections total cash available $ 36,000 $97,000 $ 36,000 $ 374,000 $410,000 $387,000 $23,000 $26,000 $154,000 $180,000 $32,590 5 $123,000 $155,590 $133,000 $22,590 6 $133,000 7 less: cash payments $148,000 $106,000 $74,000 8 ending cash balance before financing financing: plus: new borrowings -$ 15,000 10 $ 41,000 $ 3,410 $44,410 11 $ 41,000 $ 410 $ 32,590 $ 41,000 $ 410 $ 26,000 less: debt repayments 12 less: interest payments 13 $ 26,000 $ 26,000 ending cash balance 14 15

for formulas and calculations, refer to the image below -

B4 А В D 1 Alderman Health Center 2 Cash Budget for the third quarter 3 July 36000 September Quarter 4 August beginning balance of cash plus: cash collections total cash available EC14 D14 5 ЕC5 -SUM(C6: E6) - F5+ F6 154000 97000 123000 6 ЕС5+C6 =D5+D6 7 E5+E6 -SUM(C8:E8) less: cash payments 148000 133000 106000 8 ending cash balance before financing financing: plus: new borrowings =F7 -F8 E7-E8 9 ЕC7-С8 D7-D8 10 - 26000-E9 =SUM(C11:E11) -SUM(C12:E12) -SUM(C13:E13) -C9+C11- C12-C13 D9+D11-D12-D13 E9+E11-E12-E13 F9+F11 -F12-F13 - 26000-C9 11 less: debt repayments 12 =C11 -C11*1% less: interest payments 13 ending cash balance 14 15

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