Julliene's Pizzeria provided the following information for the month of October: a.Sales are budgeted to...
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Accounting
Julliene's Pizzeria provided the following information for the month of October:
a.Sales are budgeted to P157,000.About 85% of sales is cash; the remainder is on account.
b.Julliene's expects that, on average, 70% of credit sales will be paid in the month of sales, and 28% will be paid in the following month.
c.Food and supplies purchases, all on account, are expected to be P116,000.Julliene's pays 25% in the month of purchase and 75% in the month following the purchase.
d.Most of the work is done by the owners, who typically withdraw P6,000 a month from the business as their salary.(Note:The P6,000 is a payment in total to the two owners, not per person)Various part-time workers cost P7,300 per month.They are paid for their work weekly, so on average 90% of their wages is paid in the month incurred and the remaining 10% in the next month.
e. Utilities average P5,950 per month.Rent on the building is P4,100 per month.
f.Insurance is paid quarterly; the next payment of P1,200 is due in October.
g.September sales were P181,500 and purchase of food and supplies in September equaled P130,000.
h.The cash balance on October is P2,147.
How to prepare a cash budget for the month of October.
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