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		$31,200
Required minimum cash balance		26,000
Payment of income taxes (2nd quarter)		4,160
Professional salaries:
1st quarter		145,600
2nd quarter		145,600
Interest from investments (2nd quarter)		7,280
Overhead costs:
1st quarter		80,080
2nd quarter		104,000
Selling and administrative costs, including
$2,080 depreciation:
1st quarter		52,000
2nd quarter		72,800
Purchase of equipment (2nd quarter)		52,000
Sale of equipment (1st quarter)		12,480
Collections from clients:
1st quarter		244,400
2nd quarter		395,200
Interest payments (2nd quarter)		208

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

Answer 1