To make sure sufficient cash is on hand to meet monthly operational needs, North Side Hospital forecasts its monthly cash flows and short-term financing needs.

You have been asked to prepare a cash forecast (budget) for the months of January, February, and March of 2016 using the data provided below:

Patient revenues (all revenues are initially recorded as a receivable) and expenses forecasted for the first three months of 2016 are as follows:

Patient Revenues

Month	Gross Revenues	Expenses
January	$200,000	$160,000
February	$210,000	$160,000
March	$220,000	$160,000

Historical cash collections from patient revenues are as follows:

50% in month of service

20% in month after service

15% in second month after service

15% uncollectible (contractual allowances and bad debts)

To encourage prompt payment, the hospital gives a 2 percent discount if payment is made within the month of service. (Note: The 2 percent discount applies to all the 50 percent paid in the month of service.)

The accounts receivable balance at December 31, 2015, was $40,000, of which $15,000 represented uncollected November revenues and $25,000 represented uncollected December revenues.

Expenses are paid 50 percent in the month they are incurred and 50 percent in the following month. December expenses were $150,000.

Cash balance at January 1, 2016, was $40,000, and this is the minimum desired balance. To maintain this balance, any monthly cash shortfalls will be covered via an automatic short-term loan from the bank via a line of credit.

Description	Gross receivables	January Collections	February Collections	March Collections	Total Collected Excluding 2% discount	15% not collected	Remaining Receivable Balance
November receivables
December receivables
january receivables
february receivables
march receivables
less 2% discount
Total cash inflows from receivables
cash disbursment for expenses in month inccured
cash disbursment for expenses in mouth after incurred
cash balance change from operations for month
cash balance, beginning
cash from finances
cash balance, ending