The management of West Valley Memorial Hospital needs to prepare a cash budget for July 2006. The following information is available:
a. The cash balance on July 1st is $236,000.
b. Actual services performed during May and June and projected services for July are:
Cash services (bills paid by individuals):
May: $110,000 June: $90,000 July: $120,000
Credit services (bills paid by insurance co):
May: $900,000 June: $1,000,000 July: $875,000
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 $80,000 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, 2006 is $35,000.
d. Salaries and wages paid during July will be approximately $600,000. (ignore income and other tax withholdings)
e. Depreciation on the hospital and equipment for July will be $100,000.
f. A short- term bank loan of $80,000 (including interest) will be repaid in July.
g. All other cash expenses for July will total $56,000.
Prepare the hospital's July cash budget.
Excel file contains West Valley Memorial Hospital's cash budget for the month.