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Question(s) / Instruction(s):

The McKee Clinic had the following actual patient revenues during the last quarter of 2009:

             October $1,000,000

             November $1,200,000

             December $1,100,000

Estimated patient revenues for the first quarter of 2010 are:

             January $1,300,000

             February $1,200,000

             March $1,400,000

The payment pattern for patient services is expected to be:

Month earned               40%

2nd Month                     30%

3rd Month                      20%

Uncollectible                  10%

Expenses are estimated at 90% of revenues with half of that paid in the same month as the related revenue and the remaining amount paid in the following month.

The balance in the cash account at December 31, 2009 was $100,000, the desired ending cash balance is 10% of the following months expected cash outflows.  Any cash shortage is to be met via a short-term loan that increases the ending cash balance to the desired level.

What is the net cash from operations for February 2010?

a)            -$35,000

b)            +$35,000

c)            -$10,000

d)            +10,000

e)            Not determinable from data provided.

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