Lager 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 2012. 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.

Instructions Prepare a cash budget for each of the first two quarters of 2012.

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Beginning cash balance Required minimum cash balance Payment of income taxes (2nd quarter) Professional salaries: $30,000 25,000 4,000 1st quarter 2nd quarter 140,000 140,000 Interest from investments (2nd quarter) Overhead costs: 5,000 1st quarter 75,000 2nd quarter 100,000 Selling and administrative costs, including $3,000 depreciation: 1st quarter 50,000 2nd quarter 70,000 Purchase of equipment (2nd quarter) 50,000 Sale of equipment (1st quarter) 15,000 Collections from clients: 1st quarter 230,000 2nd quarter 380,000 Interest payments (2nd quarter) 300