Exercise 23-19 Pletcher Dental Clinic is a medium-sized dental service specializ

Question

Exercise 23-19 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 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: $33,870 28,225 4,516 1st quarter 2nd quarter 158,060 158,060 7,903 Interest from investments (2nd quarter) Overhead costs: 1st quarter 2nd quarter 86,933 112,900 Selling and administrative costs, including $2,258 depreciation: 56,450 79,030 56,450 13,548 1st quarter 2nd quarter Purchase of equipment (2nd quarter) Sale of equipment (1st quarter) Collections from clients 1st quarter 2nd quarter 265,315 429,020 226 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.) PLETCHER DENTAL CLINIC Cash Budget 1st Quarte 2nd Quarter Beginning Cash Balance 33,870 $ 28,225 AddReceipts Collections from Clients 265,315 429,020 Sale of Equipment

Explanation / Answer

CASH BUDGET QUARTER-1 QUARTER-2 Beginning Cash balance 33870 28225 Aadd: Reciepts Colections from clients 265315 429,020 Sale off equipment 13,548 Interest on investment 7,903 Total cash available 299185 478,696 Less: Disbursement Professional salaries 158060 158060 Payment of Income taxx 4516 Selling and Admin cost 54,192 76772 Equipment purchase 56450 Overheads cost 86933 112900 Total disbursement 299,185 408698 Excess/(deficiency) 0 69,998 Financing: Add: Borrowing 28225 Less: Repayment 28451 Ending Cash balance 28225 41,547

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