Randwick Medical Centre provides wide range of hospital services. The hospital’s board of directors has recently authorized the following capital expenditure: Tshs
Neonatal care equipment 900,000
CT scanner 800,000
X-ray equipment 650,000
Laboratory equipment 1,450,000
Total 3,800,000
The expenditures are planned for 1st October 2018, and board wishes to know the amount of borrowing, if any on that date. Jesus’son 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;

Month Actual Amount (Tshs)
January 4,400,000
February 4,400,000
March 4,500,000
April 4,500,000
May 5,000,000
June 5,000,000
July 4,500,000
August 5,000,000
September 5,500,000
October 5,700,000
November 5,800,000
December 5,500,000

80% of the hospital’s 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 50 20
During month following service 20 40
During second month following service20 30
Uncollectable 10 10

The planned purchases for 2018 are presented in the following schedule:
Month Amount (Tshs)
April 1,100,000
May 1,200,000
June 1,200,000
July 1,250,000
August 1,500,000
September 1,850,000
October 1,950,000
November 2,250,000
December 1,750,000

Additional information:
All purchases are on credit, and account payable are paid in the month following the purchase
Salaries expected to be Tshs 1,500,000 each month and are paid in the month of service.
The hospital’s monthly depreciation charges are Tshs 125,000
Interest 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.
Required
Prepare a cash budget for the last two quarter of 2018 (July to December).
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