Select Physical Therapy Inc. is planning its cash payments for operations for th
ID: 2380031 • 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 $28,000. Thebudgeted expenses for the next three months are as follows:
July August September
Salaries $63,200 $78,100 $84,900
Utilities 5,300 5,600 7,100
Other operating expenses 48, 500 52,700 58,200
Other operating expenses include $3,500 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, 70% 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.
Explanation / Answer
July August September Salaries $ 63,200.00 $ 78,100.00 $ 84,900.00 Utilities $ 5,300.00 $ 5,600.00 $ 7,100.00 Other Expenses $ 48,500.00 $ 52,700.00 $ 58,200.00 Total $ 117,000.00 $ 136,400.00 $ 150,200.00 Excluded Non-Cash Items: Depreciation $ 3,500.00 $ 3,500.00 $ 3,500.00 Monthly Insurance $ 800.00 $ 800.00 $ 800.00 Real Cash Expense (Total) $ 112,700.00 $ 132,100.00 $ 145,900.00 Cash Payment Schedule Accured Payment Schedule $ 28,000.00 $ 33,810.00 $ 39,630.00 Current Month Expenses $ 78,890.00 $ 92,470.00 $ 102,130.00 Total Payment $ 106,890.00 $ 126,280.00 $ 141,760.00