Question

Exercise 9-19 Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2020. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere Beginning cash balance $33,000 Required minimum cash balance 27,500 4,400 Payment of income taxes (2nd quarter) Professional salaries: 1st quarter 154,000 2nd quarter 154,000 Interest from investments (2nd quarter) 7,700 Overhead costs: 84,700 1st quarter 110,000 2nd quarter Selling and administrative costs, including $2,200 depreciation: 1st quarter 55,000 2nd quarter 77,000 Purchase of equipment (2nd quarter) 55,000 Sale of equipment (1st quarter) 13,200 Collections from clients: 1st quarter 258,500 2nd quarter 418,000 Interest payments (2nd quarter) 220 Prepare a cash budget for each of the first two quarters of 2020 PLETCHER DENTAL CLINIC Cash Budget

Answer 1

Pletcher Dental Clinic
Cash Budget for the first two quarters of 2020
Forr the first two quarters of 2020	1st Quarter	2nd Quarter
Cash balance, beginning	$       33,000.00	$        27,500.00
Add: cash receipts
Collections from clients	$     258,500.00	$      418,000.00
Sale of equipment	$       13,200.00
Interest from investments		$          7,700.00
Total cash receipts	$     271,700.00	$      425,700.00
Total cash available	$     304,700.00	$      453,200.00
Less: Cash Disbursements
Income taxes		$          4,400.00
Professional salaries	$     154,000.00	$      154,000.00
Overhead cost	$       84,700.00	$      110,000.00
Selling and adminsitrative cost Excluding depreciaiton	$       52,800.00	$        74,800.00
Purchase of equipment		$        55,000.00
Interest payments		$             220.00
Total cash disbursements	$     291,500.00	$      398,420.00
Excess (deficiency) of cash available over disbursements	$       13,200.00	$        54,780.00
Financing:
Borrowings	$       14,300.00
Repayments		$      (14,300.00)
Total Financing	$       14,300.00	$      (14,300.00)
Cash balance, ending	$       27,500.00	$        40,480.00