Exercise 21-19 Pletcher Dental Clinic is a medium-sized dental service specializ
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Question
Exercise 21-19
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.
Prepare a cash budget for each of the first two quarters of 2017. (Do not leave any answer field blank. Enter 0 for amounts.)
1st Quarter
2nd Quarter
Beginning cash balance $32,130 Required minimum cash balance 26,775 Payment of income taxes (2nd quarter) 4,284 Professional salaries: 1st quarter 149,940 2nd quarter 149,940 Interest from investments (2nd quarter) 7,497 Overhead costs: 1st quarter 82,467 2nd quarter 107,100 Selling and administrative costs, including $2,142 depreciation: 1st quarter 53,550 2nd quarter 74,970 Purchase of equipment (2nd quarter) 53,550 Sale of equipment (1st quarter) 12,852 Collections from clients: 1st quarter 251,685 2nd quarter 406,980 Interest payments (2nd quarter) 214Explanation / Answer
PLETCHER DENTAL CLINIC Cash Budget For the Two Quarters Ending June 30, 2017 1st Quarter 2nd Quarter Beginning Cash Balance 32130 26775 Receipts Collections from Clients 251685 406980 Sale of Equipment 12852 Interest from investment 7497 Total Receipts 264537 414477 Total Cash Available 296667 441252 Disbursements Selling and Administrative Costs 51408 72828 (53550-2142) (74970-2142) Overhead Costs 82467 107100 Payment of Income Taxes 4284 Professional Salaries 149940 149940 Interest payments 214 Equipment Purchase 53550 Total Disbursements 283815 387916 Excess (Deficiency) of Cash Available Over Cash Disbursements 12852 53336 Financing Borrowings 13923 0 (26775-12852) Repayments 0 0 Ending Cash Balance 26775 53336
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