Prepare a cash budget to Pasadena Home Health Agency for the months of May, June, and July.
Question:
Revenues for Pasadena Home Health Agency
January $
February $
March $
April $
May $
June $
July $
August $
The agency collects of its revenue in the month billing occurred, in the next month, and in the following month. The agency fails to collect of its revenue because of either bad debt or contractual allowances. Expense budget relationships are presented below:
Payroll $ per month plus x revenues
Supplies x revenues
Rent $ per month
Debt service $ in July
Capital expenditures $ in June
Eighty percent of payroll expense is paid in the month this expense was incurred, and is paid in the following month. Supplies expense is paid in the following month. All other items are paid in the month reported. Determine during which months Pasadena Home Health can invest surplus funds and during which months it might need to borrow. Please show your calculations and how to create a cash budget table
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter