Given the following information, calculate the days cash on hand: REVENUE: Net p
ID: 2771331 • Letter: G
Question
Given the following information, calculate the days cash on hand:
REVENUE:
Net patient service revenue: $3,163,258
Other revenue: $106,146
TOTAL REVENUE: $3,269,404
Expenses:
Salaries and benefits: $1,515,438
Medical supplies and drugs: $966,781
Insurance and other: $296,357
Provision for bad debts: $110,000
Depreciation: $85,000
Interest: $206,780
TOTAL EXPENSES: $3,180,356
Operating Income: $89,048
Provision for income taxes: $31,167
NET INCOME: $57,881
CURRENT ASSETS
Cash: $105,737
Marketable securities: $200,000
Net patient accounts receivable: $215,600
Supplies: $87,655
TOTAL CURRENT ASSETS: $608,992
Property amd equipment: $2,250,000
Less accumulated depreciation: $356,000
Net property and equipment: $1,894,000
TOTAL ASSETS: $2,502,992
Explanation / Answer
Cash available for the company = cash + marketable securities
= $105,737 + $200,000
= $ 305,737
Company's cash operating expenses = Salaries and benefits + Medical supplies and drugs + Insurance and other
= $1,515,438 + $966,781 + $296,357
= $ 2,778,576
Days cash on hand = 365 * Cash available for the company / Company's cash operating expenses
= 365 * 305,737 / 2,778,576
= 40.162 days
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