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 2020. 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		$30,600
Required minimum cash balance		25,500
Payment of income taxes (2nd quarter)		4,080
Professional salaries:
1st quarter		142,800
2nd quarter		142,800
Interest from investments (2nd quarter)		7,140
Overhead costs:
1st quarter		78,540
2nd quarter		102,000
Selling and administrative costs, including
$2,040 depreciation:
1st quarter		51,000
2nd quarter		71,400
Purchase of equipment (2nd quarter)		51,000
Sale of equipment (1st quarter)		12,240
Collections from clients:
1st quarter		239,700
2nd quarter		387,600
Interest payments (2nd quarter)		204

Prepare a cash budget for each of the first two quarters of 2020.

Answer 1