Question

Score: 0 of 4 pts 7 of 98.com HW Score: 78.99% E9-30A (similar to) BQ LaChut 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 cour (Click the icon to view the expected transactions) Requirement Prepare a combined cash budget for Lachut Health Center for the third quarter with a column for each month and for the quarter total of box is not used in the table leave the box emply do not trazer Use parentheses for negative ending cash balances.) More info Lachut Health Center Combined Cash Budget For the Months of July through September July Beginning balance of cash 35000 Plus Cash collections 92000 Total cash available 127000 145000 Less Cash payment Ending cash balance before financing - 16000 Financing Plus: New borrowings 0 Less Debt repayments Less: Interest payments Ending cash balance a. Cash collections from services in July August, and September are projected to be 502.000, 5153.000, and $128.000 respectively b. Cash payments for the upcoming third quarter are projected to be $145,000 in July 5102,000 in August, and $139.000 in September e. The cash balances of the first day of the third quarter is projected to be $35,000 d. The health center has a policy that it must maintain a minimum cash balance of $24,000. 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 the company has more than minimum balance at the end of any given month, uses the excess funds to pay off any outstanding line of credit balance. Each month, LaChut Health Center pays interest on the prior month's line of creditanding 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 2% 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, LaChut Health Center did not have a balance on its line of credit 0 Print Done Enter any number in the edit fields and then click Check Answer parts remaining Clear All Check Answer

I need help finding the new borrowings.

Answer 1

New borrowing $42,000

The Lachut health centre has a policy to maintain a minimum cash balance of $24,000.

In July Cash is negative18000

Company needs to borrow $42,000 (24000+18000)