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EXERCISE 9-31

1.

Direct professional labor budget for the month of June:


Office visits per month = 48,000/12 = 4,000
Professional services in June:
One-hour visits (20% 4,000 1 hr.)....................................
Half-hour visits (80% 4,000 1/2 hr.).................................
Total direct professional labor................................................
Hourly rate for dental associates ...........................................
Total direct professional labor cost.......................................

2.

800 hours
1,600 hours
2,400 hours
$ 60
$144,000

Cash collections during June:


Half-hour visits (4,000 80%).................................................
Billing rate .................................................................................
Total billings for half-hour visits ............................................
One-hour visits (4,000 20%) ................................................
Billing rate .................................................................................
Total billings for one-hour visits ............................................
Total billings during month.....................................................
Percentage of month's billings collected
during June ...........................................................................
Collections during June ..........................................................
Total collections in June ($18,400 + $165,600).....................

May
3,200

$40
$128,000
800

$70
$ 56,000
$184,000

June
3,200

$40
$128,000
800

$70
$ 56,000
$184,000

10%
$ 18,400

90%
$165,600
$184,000

3. Overhead and administrative expense budget for June:


Patient registration and records (4,000 visits $2.00 per visit)...
Other overhead and administrative expenses
(2,400 hours $5.00 per hour)....................................................
Total overhead and administrative expenses ........ ............ ...........

$ 8,000
12,000
$20,000

4. In the electronic version of the solutions manual, press the CTRL key and click on
the following link: Build a Spreadsheet 09-31.xls

PROBLEM 9-34
1.

Schedule of cash collections:


January
Collection of accounts receivable:
$55,000 x 20%...
Collection of January sales ($150,000):
60% in January; 35% in February ..
Collection of February sales ($180,000):
60% in February; 35% in March..
Collection of March sales ($185,000):
60% in March; 35% in April..
Sale of equipment.
Total cash collections

2.

February

$ 11,000
90,000

$101,000

$ 52,500
108,000

$ 63,000

$160,500

111,000
5,000
$179,000

Schedule of cash disbursements:


January
Payment of accounts payable... $ 22,000
Payment of January purchases ($90,000):
70% in January; 30% in February..
63,000
Payment of February purchases ($100,000):
70% in February; 30% in March..
Payment of March purchases ($140,000):
70% in March; 30% in April..
Cash operating costs..
31,000
Total cash disbursements... $116,000

3.

March

February

March

$ 27,000
70,000

$ 30,000

24,000
$121,000

98,000
45,000
$173,000

Cash budget:
January

February

March

Beginning cash balance. $ 20,000


Total receipts.
101,000
Subtotal. $121,000
Less: Total disbursements
116,000
Cash excess (deficiency) before financing $ 5,000
Financing:
Borrowing to maintain $20,000 balance..
15,000
Loan principal repaid
Loan interest paid..
Ending cash balance $ 20,000

$ 20,000
160,500
$180,500
121,000
$ 59,500

$ 44,300
179,000
$223,300
173,000
$ 50,300

(15,000)
(200)*
$ 44,300

$ 50,300

* $15,000 x 8% x 2/12
5

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