Pletcher Dental Clinic is a medium-sized dental service specializing in family d
ID: 2436855 • Letter: P
Question
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 2017 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 Required minimum cash balance Payment of income taxes (2nd quarter) Professional salaries $34,260 28,550 4,568 1st quarter 2nd quarter 159,880 159,880 7,994 Interest from investments (2nd quarter) Overhead costs 1st quarter 2nd quarter 87,934 114,200 Selling and administrative costs, including $2,284 depreciation 57,100 79,940 57,100 13,704 1st quarter 2nd quarter Purchase of equipment (2nd quarter) Sale of equipment (1st quarter) Collections from clients: 1st quarter 2nd quarter 268,370 433,960 228 Interest payments (2nd quarter) Prepare a cash budget for each of the first two quarters of 2017. (Do not leave any answer field blank. Enter 0 for amounts.)Explanation / Answer
Solution:
Cash Budget
PLETCHER DENTAL CLINIC
CASH BUDGET
For the Two Quarters Ending June 30, 2017
1st Quarter
2nd Quarter
Beginning Cash Balance
$34,260
$28,550
Add: Receipts
Collection from Clients
$268,370
$433,960
Sale of Equipment
$13,704
$0
Investment Interest
$0
$7,994
Total Receipts
$282,074
$441,954
Total Cash Available
$316,334
$470,504
Less: Cash disbursements
Professional Salaries
$159,880
$159,880
Selling and administrative costs (excluding depreciation since depreciation is a non cash item)
$54,816
$77,656
Purchase of Equipment
$0
$57,100
Overhead Costs
$87,934
$114,200
Payment of Income taxes
$0
$4,568
Interest payment
$0
$228
Total cash disbursements
$302,630
$413,632
Excess (deficiency) of cash available over disbursements
$13,704
$56,872
Financing
Add: Borrowings
$14,846
$0
Less: Repayments
$0
-$14,846
Ending Cash Balance
$28,550
$42,026
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
PLETCHER DENTAL CLINIC
CASH BUDGET
For the Two Quarters Ending June 30, 2017
1st Quarter
2nd Quarter
Beginning Cash Balance
$34,260
$28,550
Add: Receipts
Collection from Clients
$268,370
$433,960
Sale of Equipment
$13,704
$0
Investment Interest
$0
$7,994
Total Receipts
$282,074
$441,954
Total Cash Available
$316,334
$470,504
Less: Cash disbursements
Professional Salaries
$159,880
$159,880
Selling and administrative costs (excluding depreciation since depreciation is a non cash item)
$54,816
$77,656
Purchase of Equipment
$0
$57,100
Overhead Costs
$87,934
$114,200
Payment of Income taxes
$0
$4,568
Interest payment
$0
$228
Total cash disbursements
$302,630
$413,632
Excess (deficiency) of cash available over disbursements
$13,704
$56,872
Financing
Add: Borrowings
$14,846
$0
Less: Repayments
$0
-$14,846
Ending Cash Balance
$28,550
$42,026