Question

Schedule of Cash Payments for a Service Company

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 $27,900. The budgeted expenses for the next three months are as follows:

	January		February		March
Salaries	$64,200		$78,100		$86,500
Utilities	5,300		5,900		7,000
Other operating expenses	48,800		53,200		58,600
Total	$118,300		$137,200		$152,100

Other operating expenses include $3,500 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, 80% 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. Enter all amounts as positive numbers.

EastGate Physical Therapy Inc.
Schedule of Cash Payments for Operations
For the Three Months Ending March 31
	January	February	March
Payments of prior month's expense	$	$	$
Payments of current month's expense
Total cash payments	$	$	$

Answer 1

	January	February	March
Salaries	$64,200	$78,100	$86,500
Utilities	5,300	5,900	7,000
Other operating expenses	48,800	53,200	58,600
Total	$118,300	$137,200	$152,100
Schedule of cash payments
	Jan	Feb	Mar
Payment of prior month expense	27,900	22,800	26,580
Payment of Current month expense	91,200	106,320	118,240
Total cash payments	119,100	129,120	144,820

Depreciation is a non cash expense and hence, does not affect cash