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 2020. 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		$30,600
Required minimum cash balance		25,500
Payment of income taxes (2nd quarter)		4,080
Professional salaries:
1st quarter		142,800
2nd quarter		142,800
Interest from investments (2nd quarter)		7,140
Overhead costs:
1st quarter		78,540
2nd quarter		102,000
Selling and administrative costs, including
$2,040 depreciation:
1st quarter		51,000
2nd quarter		71,400
Purchase of equipment (2nd quarter)		51,000
Sale of equipment (1st quarter)		12,240
Collections from clients:
1st quarter		239,700
2nd quarter		387,600
Interest payments (2nd quarter)		204

Prepare a cash budget for each of the first two quarters of 2020.

Answer 1

--Requirement asked

Cash Budget
For the two quarters ending 30 June 2020
	1st	2nd
Beginning Cash balance	$30,600	$25,500
Add: Receipts
Collection from clients	$239,700	$387,600
Sale of equipment	$12,240
Investment Interest		$7,140
Total receipts	$251,940	$394,740
Total Cash available	$282,540	$420,240
Less: Disbursements
Professional salaries	$142,800	$142,800
Payment of income taxes		$4,080
Selling & Administrative Costs	$48,960	$69,360
Equipment purchase		$51,000
Overhead cost	$78,540	$102,000
Total Disbursements	$270,300	$369,240
Excess (Deficiency) of Cash available over cash disbursements	$12,240	$51,000
Financing:
Add: Borrowings	$13,260	$0
Less: Repayments	$0	$204
Ending Cash balance	$25,500	$50,796