Pletcher Dental Clinic is a medium-sized dental service specializing in family d

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.

Prepare a cash budget for each of the first two quarters of 2017.

Beginning cash balance $30,000 Required minimum cash balance 25,000 Payment of income taxes (2nd quarter) 4,000 Professional salaries:     1st quarter 140,000     2nd quarter 140,000 Interest from investments (2nd quarter) 7,000 Overhead costs:     1st quarter 77,000     2nd quarter 100,000 Selling and administrative costs, including $2,000 depreciation:     1st quarter 50,000     2nd quarter 70,000 Purchase of equipment (2nd quarter) 50,000 Sale of equipment (1st quarter) 12,000 Collections from clients:     1st quarter 235,000     2nd quarter 380,000 Interest payments (2nd quarter) 200

Explanation / Answer

Answer:-

Pletcher Dental Clinic Cash Budget Particulars 1st Quarter 2nd Quarter $ $ Beginning cash balance (A) 30000 25000 Cash Collection:- Collection from clients 235000 380000 Interest from investments 0 7000 Sale of equipment 12000 0 Total cash collections (B) 247000 387000 Cash Payments:- Payment of income taxes 0 4000 Professional salaries 140000 140000 Overhead costs 77000 100000 Selling & Administrative costs excliuding depreciation 48000 68000 Purchase of equipment 0 50000 Interest payments 0 200 Total cash payments (C) 265000 362200 Closing cash balance (D=A+B-C) 12000 49800 Borrowings 13000 Minimum cash balance required 25000 25000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---