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 $26,200. The budgeted expenses for the next three months are as follows:

	January		February		March
Salaries	$60,300		$73,400		$81,200
Utilities	5,000		5,500		6,600
Other operating expenses	45,800		49,900		55,000
Total	$111,100		$128,800		$142,800

Other operating expenses include $3,300 of monthly depreciation expense and $800 of monthly insurance expense that was prepaid for the year on May 1 of the previous year. Of the remaining expenses, 80% 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	$	$	$

Answer 1

Schedule of cash payments :
Particulars	January	February	March
salaries	60300	73400	81200
utilities	5000	5500	6600
Other operating expenses	59560	44980	49880
TOTAL	124860	123880	137680
Working notes for Operating expenses :
	January	February	March
Incurred in current month	33360 [(45800-3300-800)*80%]	36640 [(49900-3300-800)*80%]	40720 [(55000-3300-800)*80%]
Incurred in previous month	26200	8340 (41700*20%)	9160 (45800*20%)
	59560	44980	49880