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Pediatric Partners has forecasted billed charges for the first six months of the year as shown...

Pediatric Partners has forecasted billed charges for the first six months of the year as shown in the table below. Based on historic collection patterns, Pediatric Partners expects to collect charges as follows: 5 percent within 30 days, 85 percent within 60 days, and 5 percent within 90 days. The remaining 5 percent is expected to be uncollectible. What should be budgeted for cash collections in each of the months January through June?

Month Billed Charges Cash Collection
Jan $99,000 ?
Feb $99,000 ?
March $99,000 ?
April $105,000 ?
May $105,000 ?
June $105,000 ?

Solutions

Expert Solution

Month

Bill charges

Cash collections

Jan

$99000

=99000*5%=4950

Feb

$99000

=(99000*85%)+(4950)

=84150+4950=89100

Mar

$99000

4950+84150+4950=94050

Apr

$105000

=(105000*5%)+84150+4950=

5250+84150+4950=94350

May

$105000

=5250+(105000*85%)+4950

=5250+89250+4950=99450

Jun

$105000

=5250+89250+5250=99750

                                                                                                                  

TOTAL

481650

jeff jeffy answered 2 years ago
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