Problem:
St. Cloud Memorial has annual revenues of $3,900,300. Payment is made by 2 third party payers and some of the patients are self payers. 8% self pay on day 30. Payer A makes up 49% and pays on day 60. Payer B makes up 43% and pays on day 90. (Assume 365 days per year through out the next 3 questions)
Required:
Question 1: What is the average collection period for St. Cloud Memorial?
Question 2: What is St. Cloud Memorial's receivables balance?
Question 3: What would be St. Cloud Memorials receivables balance if a new collection system shifted collection from third party payers to 50 days and 70 days instead of 60 days and 90 days?
Note: Please answer in proper manner and show all computations