Pletcher Dental Clinic is a medium-sized dental service specializing in family d
ID: 2531556 • 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: $32,130 26,775 4,284 1st quarter 2nd quarter 149,940 149,940 7,497 Interest from investments (2nd quarter) Overhead costs: 1st quarter 2nd quarter 82,467 107,100 Selling and administrative costs, including $2,142 depreciation: 1st quarter 2nd quarter Purchase of equipment (2nd quarter) Sale of equipment (1st quarter) Collections from clients: S3,550 74,970 S3,550 12,852 ist quarter 2nd quarter 251,685 406,980 214 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 O for amounts.)Explanation / Answer
1st 2nd Quarter Quarter Beginning cash balance 32,130 26,775 Add:Receipts Collection from Clients 251,685 406,980 Sale of Equipment 12,852 0 Investment Interest 0 7,497 total Receipts 264,537 414,477 total cash available 296,667 441,252 less:disbursements professional salaries 149,940 149,940 payment of income taxes 0 4,284 Selling & administrative costs 51408 72828 Equipment purchase 0 53,550 overhead costs 82,467 107,100 total Disbursement 283,815 387,702 Excess(Deficiency)of cash available 12,852 53,550 financing: Borrowing (26775-12852) 13923 0 less:Repayments (214+13923) 0 14137 ending cash balance 26,775 39,413