SAT

Randwick Medical Centre provides wide range of hospital services. The hospitals board of directors has recently authorized the following capital expenditure:TshsNeonatal care equipment900,000CT scanner 800,000X-ray equipment650,000Laboratory equipment1,450,000Total3,800,000The expenditures are planned for 1st October 2018, and board wishes to know the amount of borrowing, if any on that date. Jesusson the management accountant has gathered the following information to be used in preparing an analysis of future cash flows:Billings for the first six months of 2018 made in the month of service are as follows;MonthActual Amount (Tshs)January 4,400,000February 4,400,000March4,500,000April 4,500,000May 5,000,000June 5,000,000July 4,500,000August5,000,000September 5,500,000October5,700,000November 5,800,000December 5,500,00080% of the hospitals billing are made to health insurance fund (NHIF) the remaining 20% of billing are made directly to patients. Historical patterns of billing receipts are presented below:NHIF billing (%)Direct patient billing (%)During month of service 5020During month following service2040During second month following service2030Uncollectable1010The planned purchases for 2018 are presented in the following schedule:Month Amount (Tshs)April 1,100,000May1,200,000June1,200,000July1,250,000August 1,500,000September1,850,000October1,950,000November2,250,000December1,750,000Additional information:All purchases are on credit, and account payable are paid in the month following the purchaseSalaries expected to be Tshs 1,500,000 each month and are paid in the month of service.The hospitals monthly depreciation charges are Tshs 125,000Interest expenses of Tshs 150,000 are incurred on the last day of each quarter ( 31 March, 30 June, 30 September and 31 December.Investment income is expected to continue at the rate of Tshs 175,000 per month.The hospital has a cash balance of Tshs 300,000 on 1st July 2018 and has a policy to maintaining a minimum end of month cash balance of 10% of current month purchases.The hospital uses a calendar year reporting period.RequiredPrepare a cash budget for the last two quarter of 2018 (July to December).