Select Physical Therapy Inc. is planning its cash payments for operations for th
ID: 2374925 • Letter: S
Question
Select Physical Therapy Inc. is planning its cash payments for operations for the third quarter (July-September), 2013. The Accrued Expenses Payable balance on July 1 is $28,300. The budgeted expenses for the next three months are as follows:
Other operating expenses include $3,600 of monthly depreciation expense and $800 of monthly insurance expense that was prepaid for the year on March 1 of the current year. Of the remaining expenses, 80% are paid in the month in which they are incurred, with the remainder paid in the following month. The Accrued Expenses Payable balance on July 1 relates to the expenses incurred in June.
Prepare a schedule of cash payments for operations for July, August, and September.
July August September Salaries $65,100 $79,200 $87,700 Utilities 5,400 5,900 7,100 Other operating expenses 50,800 55,400 61,000 Total $121,300 $140,500 $155,800Explanation / Answer
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Please find the answer as follows;
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July August September Salaries 65,100 79,200 87,700 Utilities 5,400 5,900 7,100 Other operating expenses 50,800 55,400 61,000 Total 1,21,300 1,40,500 1,55,800 Less Adjustments for Non Cash Expenses
Depreciation Expense 3,600 3,600 3,600 Insurance Expense 800 800 800 Actual Cash Expenses 1,16,900 1,36,100 1,51,400
Payment of Prior Month's Expense 28,300 23,380 27,220 Payment of Current Month's Expense 93,520 1,08,880 1,21,120 Total Payment 1,21,820 1,32,260 1,48,340