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 $30,900 Required minimum cash balance 25,750 Payment of income taxes (2nd quarter) 4,120 Professional salaries: 1st quarter 144,200 2nd quarter 144,200 Interest from investments (2nd quarter) 7,210 Overhead costs: 1st quarter 79,310 2nd quarter 103,000 Selling and administrative costs, including $2,060 depreciation: 1st quarter 51,500 2nd quarter 72,100 Purchase of equipment (2nd quarter) 51,500 Sale of equipment (1st quarter) 12,360 Collections from clients: 1st quarter 242,050 2nd quarter 391,400 Interest payments (2nd quarter) 206 Prepare a cash budget for each of the first two quarters of 2020.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the
| Beginning cash balance | $30,900 | |
| Required minimum cash balance | 25,750 | |
| Payment of income taxes (2nd quarter) | 4,120 | |
| Professional salaries: | ||
| 1st quarter | 144,200 | |
| 2nd quarter | 144,200 | |
| Interest from investments (2nd quarter) | 7,210 | |
| 1st quarter | 79,310 | |
| 2nd quarter | 103,000 | |
| Selling and administrative costs, including | ||
| $2,060 depreciation: | ||
| 1st quarter | 51,500 | |
| 2nd quarter | 72,100 | |
| Purchase of equipment (2nd quarter) | 51,500 | |
| Sale of equipment (1st quarter) | 12,360 | |
| Collections from clients: | ||
| 1st quarter | 242,050 | |
| 2nd quarter | 391,400 | |
| Interest payments (2nd quarter) | 206 |
Prepare a cash budget for each of the first two quarters of 2020.
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PLETCHER DENTAL CLINIC
Cash Budget For the Two Quarters Ending June 30, 2020June 30, 2020For the Month Ending June 30, 2020 |
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1st Quarter
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2nd Quarter
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