Mitchell Mundy 628 ime Remaining0157 41 This Test3 Module 4

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...

Solution

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