ecule af Cash Payts for a Service Company tistPhyucal Therap

ecule af Cash Payts for a Service Company tist·Phyucal Therapy Inc. ? itscash payments f reperations for fost ear terDanaary-arch), Th. Accrued Expernas Payable balece on January 1 is $15 000. The budgtedexp-for the neat three months a Janwary February 2,400 2,600 41 300 112.200 2,500 91.600 $119,800 dog expenses include 42.000 of modly dge.datia\" eo .se .nd $500 of memNy im rance expense th\" wn pmp d ferthe year on May lofthe previo n year. Ode ng-penses, 70% are paid ints mo re a schedule of cash payments for operations for January, Febnuary, and March Fatliate Pysical Therapy Ine Schedule of Cash Payments for Operations For the Three Hoths Ending Harch 31 January February Har

Solution

schedule of cash payments for operations

for the three months ending march 31

working note:

(3000 + 500 =>3500) of non cash expense comprising of depreciation and insurance expense is to be deducted every month.

in january we will pay accrued balance payable on january 1 i.e $15,000.

out of total expenses of 91,600

$3,500 is non cashexpense.......(depreciation+prepaid insurance)

of the remaining (91600-3500)

=>88,100.

70% is paid in january

=>88,100*70% = $61,670 is paid in january.

30% i.e 88,100 * 30% =>26,430 is paid in february.

now,

february cash expenses = $112,200 - 3500 =>108,700.

70% is paid in february =>108,700 * 70% =>76,090.

30% is paid in march =>108,700*30% =>32,610.

now.

march cash expense =119,400 - 3500 =>115,900

70% is paid in march =115,900 * 70% =>81,130.

30% is paid in april =115,900 *30%=>34,770.

	january	february	march
payments of prior month\'s expense	$15,000	26,430	32,610
payments of current months expense	61,670	76,090	81,130
total payment	76,670	102,520	113,740