Exercise 23-19 Your answer is partially correct. Try again. Pletcher Dental Clin

Question

Exercise 23-19 Your answer is partially correct. Try again. 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: 1st quarter 2nd quarter Purchase of equipment (2nd quarter) Sale of equipment (1st quarter) Collections from clients: 56,450 79,030 56,450 13,548 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.)

Explanation / Answer

Cash Budget

(14677+226)

14,903

Particulars 1st Quarter ($) 2nd Quarter ($) Beginning Cash balance 33,870 28,225 Add: Receipts Collection from clients 265,315 429,020 Sale of Equipment 13,548 0 Investment Interest 0 7,903 Total receipts 278,863 436,923 Total Cash available 312,733 465,148 Less: Disbursements Professional salaries 158,060 158,060 Payment of income taxes 0 4,516 Selling and administrative costs (excluding Depreciation) 54,192 76,772 Equipment Purchases 0 56,450 Overhead costs 86,933 112,900 Total disbursements 299,185 408,698 Excess(Deficiency) of cash available over cash disbursements 13,548 56,450 Financing: Add: Borrowings 14,677 0 Less: Repayments 0

(14677+226)

14,903

Ending cash balance 28,225 41,547

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