Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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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 $34,800. The budgeted expenses for the next three months are as follows:

  January February March
Salaries $80,000   $97,400   $107,900  
Utilities 6,600   7,300   8,700  
Other operating expenses 60,800   66,300   73,000  
Total $147,400   $171,000   $189,600  

Other operating expenses include $4,400 of monthly depreciation expense and $1,000 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.

EastGate Physical Therapy Inc.Schedule of Cash Payments for OperationsFor the Three Months Ending March 30

  January February March
Payments of prior month's expense $fill in the blank $fill in the blank $fill in the blank
Payments of current month's expense fill in the blank fill in the blank fill in the blank
Total payments $fill in the blank $fill in the blank $fill in the blank
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