Question

Schedule of Cash Payments

EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $27,100. The budgeted expenses for the next three months are as follows:

	January		February		March
Salaries	$62,300		$75,900		$84,000
Utilities	5,100		5,700		6,800
Other operating expenses	47,300		51,600		56,800
Total	$114,700		$133,200		$147,600

Other operating expenses include $3,400 of monthly depreciation expense and $800 of monthly insurance expense that was prepaid for the year on May 1 of the previous year. Of the remaining expenses, 65% are paid in the month in which they are incurred, with the remainder paid in the following month. The Accrued Expenses Payable balance on January 1 relates to the expenses incurred in December.

Prepare a schedule of cash payments for operations for January, February, and March.

EastGate Physical Therapy Inc.
Schedule of Cash Payments for Operations
For the Three Months Ending March 30
	January	February	March
Payments of prior month's expense	$	$	$
Payments of current month's expense
Total payments	$	$	$

Answer 1

Workings
	December Payable	January	February	March
Salaries	$                       27,100	$         62,300	$         75,900	$         84,000
Utilities		$           5,100	$           5,700	$           6,800
Other operating expenses		$         47,300	$         51,600	$         56,800
Total		$       114,700	$       133,200	$       147,600
After Deduction(3400+800)		$       110,500	$       129,000	$       143,400
Answer
	January	February	March
Payments of prior month's expense	$                       27,000	$         38,675	$         45,150
Payments of current month's expense((Expense for the month-(3400+800)*65%)	$                       71,825	$         83,850	$         93,210
Total payments	$             98,825	$122,525	$138,360