Question

Please read the below scenario carefully and prepare a brief income statement, balance sheet and cash forecast for the next 15 days.

Scenario:

We are opening a new office in a semi-rural town. We are excited to help the families and kids there, but don’t know how long it will take for the office to ramp up (see enough patients). Our budget for the office was $100,000, composed of $50,000 furniture and equipment, $30,000 supplies, and $20,000 extra cash to market and get started. We are now up and running and 2 months in. We have collected the below fees and have the below invoices to date. Using Excel, please prepare your thoughts on the P&L, the start-up expenses/budget/balance sheet and the cash outlook.

Start up invoices:

Equipment company - $45,000

Refrigerator - $1000

Furniture - $3,000

Initial dental supply order - $23,000

Office supplies - $4,000

Deposit on Utilities - $1,000

Production (work we have performed) - $30,000

Cash collected (AR collected) - $10,000

Invoices since we have been open:

Paid:

Second Dental supply order - $5,000

Initial Payroll - $15,000

Third Dental supply order - $5,000

Utilities - $1,500

Other:

Marketing mailers - $10,000 – due in 10 days

Last, there is a payroll next week for $7,500

Answer 1