Mitchell Mundy & 6/28 ime Remaining:01:57 41 This Test3 (Module 4 - ch. 8, 9) 2
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Question
Mitchell Mundy & 6/28 ime Remaining:01:57 41 This Test3 (Module 4 - ch. 8, 9) 2 of 8 (0 complete) ovides a variety of me the expected transadi budget for Monette More Info ding cash balances.) pty, do not enter a zero. Use pa a. Cash collections from services in July, August, and September, are projected to be $98,000, $154,000, and $125,000 respectively ash h payments for the upcoming third quarter are projected to be $146,000 in July, $101,000 in August, and $139,000 in September c. The cash balance as of the first day of the third quarter is projected to be $32,000 d. The health center has a policy that it must maintain a minimum cash balance of $23,000 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. 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, Monette Health Center pays interest on the prior month's line of credit ending 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 (if the company did not have an outstanding balance at the end of the prior month, then the health center does not efore financing ts e 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 have the third quarter, Monette Health Center did not have a balance on its line of credit nts Print Done edit fields and then dom Take a Test - Mitch...Explanation / Answer
Combined cash budget
July August September Quarter Beginning balance of cash $32000 $23000 $36220 $91220 Plus: Cash collections 98000 154000 125000 377000 Total cash available $130000 $177000 $161220 $468220 Less: Cash payments -146000 -101000 -139000 -386000 Ending cash balance before financing -16000 76000 22220 82220 Financing: Plus: New borrowings 39000 780 39780 Less: Debt repayments -39000 -39000 Less: Interest repayments -780 -780 Ending cash balance 23000 36220 23000 82220