Acc104 Managerial Accounting: E18-32 The management of Table Rock Memorial Hospital

Acc104 Managerial Accounting 

E18-32 Cash Budgeting-Hospital  
The management of Table Rock Memorial Hospital needs to prepare a cash budget for July 2009. The following information is available:  
a. The cash balance on July 1, 2009, is $245,000.  
b. Actual services performed during May and June and projected services for July are:  
                                                                                           May            June       July  May June July 
Cash services (bills paid by individuals as they leave the hospital) 115,000 98,000 115,000 
Credit services (bills paid by insurance companies and Medicare) 950,000 1,075,000 950,000 

Credit sales are collected over a 2-month period, with 60% collected during the month the service is performed and 40% in the following month.  

c. Hospital personnel plan to purchase $70,000 of supplies during July on account. Accounts payable are usually paid one-half in the month of purchase and one-half in the following month. The accounts payable balance on July 1, 2009, is $30,000.  
d. Salaries and wages paid during July will be approximately $650,000. (Ignore income and other tax withholdings.)  
e. Depreciation on the hospital and equipment for July will be $120,000.  
f. A short-term bank loan of $90,000 (including interest) will be repaid in July.  
g. All other cash expenses for July will total $86,000.  

Prepare the hospital's July cash budget. 
Powered by