39. Cash budget. Jim Zeeman Clinic provided the financial information in Exhibit
ID: 2445894 • Letter: 3
Question
39. Cash budget. Jim Zeeman Clinic provided the financial information in Exhibit 5.14. Prepare a cash budget for the clinic for the quarter ending March 20X1.
EXHIBIT 5.14 JIM ZEEMAN CLINIC
Givens
Revenues and Expenses
Given 1 Patient Revenues, 20X0 Given 2 Estimated Patient Revenues 20X1
October $4,000,000 January $4,400,000
November $4,200,000 February $4,600,000
December $4,400,000 March $4,800,000
Given 3 Other Revenues, 20X1 Given 4 Estimated Cash Outflows, 20X1(a)
January $78,000 January $3,000,000
February $120,000 February $3,200,000
March $200,000 March $3,400,000
April $3,000,000
Given 5 Receipt of Payment for Patient Revenues and Services
Current month of service 60%
1st month of prior service 30%
2nd month of prior service 10%
3rd+ months of prior service 0%
Given 6 Ending Cash Balances
December $800,000
20X0
(b) 40%
aCash outflows for the current month.
bThe ending balance for each month as a percentage of the estimated cash outflows for the next month.
Explanation / Answer
Answer:
Particulars Oct Nov Dec Jan Feb March Opening cash balance 800000 Estimated patients revenue 4000000 4200000 4400000 4400000 4600000 4800000 Collection: Current month of service 60% 2400000 2520000 2640000 2640000 2760000 2880000 1st month of prior service 30% 1200000 1260000 1320000 1320000 1380000 2nd month of prior service 10% 400000 420000 440000 440000 Total cash collection 2400000 3720000 4300000 4380000 4520000 4700000 Other revenue 78000 120000 200000 Total cash receipts 5258000 4640000 4900000 Estimated Cash Outflows 3,000,000 3200000 3400000 Payment 40% in current month 1200000 1280000 1360000 60% in second month 1800000 1920000 Total cash payment 1200000 3080000 3280000 Cash balance (Receipts-Payments) 4058000 1560000 1620000Related Questions
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