Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. i

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 $33,600. The budgeted expenses for the next three months are as follows March February $94,100 7,100 64,900 $166,100 January Salaries Utilities Other operating expenses $77,300 $104,200 8,400 71,400 $184,000 6,400 59,500 Total $143,200 Other operating expenses include $4,200 of monthly depreciation expense and $1,000 of monthly insurance expense that was prepaid for the year on May 1 of the previous year. Of the remaining expenses, 75% 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 Total cash payments

Explanation / Answer

Working note : Break up of Cash Expenses each month

Answer

EastGate Physical Therapy Inc.

Schedule for Cash Payments for Operations

For the Three Months Ending March 31

Particulars Jan Feb March Salaries 77,300 94,100 104,200 Utilities 6,400 7,100 8,400 Other Operating Expenses 59,500 64,900 71,400 Less : Depreciation (4,200) (4,200) (4,200) Less : Prepaid Insurance (1,000) (1,000) (1,000) Total Budgeted Cash Expense $138,000 $160,900 $178,800 Payment of current month's expenses (75 %) $103,500 $120,675 $134,100 Payment of prior month' expenses (25 %) $33,600(given) $34,500 $40,225

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