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.

Beginning cash balance		$38,220
Required minimum cash balance		31,850
Payment of income taxes (2nd quarter)		5,096
Professional salaries:
1st quarter		178,360
2nd quarter		178,360
Interest from investments (2nd quarter)		8,918
Overhead costs:
1st quarter		98,098
2nd quarter		127,400
Selling and administrative costs, including
$2,548 depreciation:
1st quarter		63,700
2nd quarter		89,180
Purchase of equipment (2nd quarter)		63,700
Sale of equipment (1st quarter)		15,288
Collections from clients:
1st quarter		299,390
2nd quarter		484,120
Interest payments (2nd quarter)		255

Prepare a cash budget for each of the first two quarters of 2017. (Do not leave any answer field blank. Enter 0 for amounts.)

Answer 1

Cash budget
	Qtr 1	Qtr 2	Total
Opening cash Balance	38,220	31,850	38,220
Add: receipts
Collection from Customers	299,390	484,120	783,510
Interest from Investments	-	8,918	8,918
Sale of Equipment	15,288	-	15,288
Total Cash available	352,898	524,888	845,936
Less: Cash Payments
Income Tax	-	5,096	5,096
Professional Salaries	178,360	178,360	356,720
Overhead Costs	98,098	127,400	225,498
Selling & Admn. Expenses	61,152	86,632	147,784
Purchase of Equipment	-	63,700	63,700
Interest Payment	-	255	255
Total Disbursement	337,610	461,443	799,053
Cash Balance Closing	15,288	63,445	46,883
Add: Borrowings from Bank	16,562	-	16,562
Less: Payment to Bank	-	(16,562)	(16,562)
Net Cash Balance Closing	31,850	46,883	46,883