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    Table Rock Memorial Hospital

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    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
    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.

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    Solution Preview

    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 ...

    Solution Summary

    This solution is comprised of a detailed explanation to prepare the hospital's July cash budget.

    $2.19

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