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Budgeted Cash Collections In an effort to improve cash collection, Suburban Medical Clinic offers terms of...

Budgeted Cash Collections

In an effort to improve cash collection, Suburban Medical Clinic offers terms of 2/10, n/30, with a 5% discount on patient payments made with cash. Suburban estimates its total billings for the second calendar quarter of the year as follows: April, $200,000; May, $240,000; and June, $290,000. Historically, Suburban has had the following patient collection patterns:

Portions of
Total Sales
In month of sale:
Cash at time of sale 25%
On account during the discount period 20%
On account after the discount period 10%
In month following sale:
On account after the discount period 25%
In second month following sale:
On account after discount period 15%
Average portion uncollectible 5%
100%

What would be Suburban’s budgeted total cash collections for June?

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Expert Solution

Please comment for any explanation,

Thanks,

ekkarill92 answered 1 year ago
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