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
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 | $30,000 | |
| Required minimum cash balance | 25,000 | |
| Payment of income taxes (2nd quarter) | 4,000 | |
| Professional salaries: | ||
| 1st quarter | 140,000 | |
| 2nd quarter | 140,000 | |
| Interest from investments (2nd quarter) | 7,000 | |
| Overhead costs: | ||
| 1st quarter | 77,000 | |
| 2nd quarter | 100,000 | |
| Selling and administrative costs, including | ||
| $2,000 depreciation: | ||
| 1st quarter | 50,000 | |
| 2nd quarter | 70,000 | |
| Purchase of equipment (2nd quarter) | 50,000 | |
| Sale of equipment (1st quarter) | 12,000 | |
| Collections from clients: | ||
| 1st quarter | 235,000 | |
| 2nd quarter | 380,000 | |
| Interest payments (2nd quarter) | 200 |
Prepare a cash budget for each of the first two quarters of 2017.
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ISE Managerial Accounting
Authors: Ray H. Garrison, Eric Noreen, Peter C. Brewer
17th Edition
1260575683, 9781260575682
