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Preparing a Cash Budget

La Famiglia Pizzeria provided the following information for the month of October:

a$.$ Sales are budgeted to be $$150,000.$ About $85\%$ of sales is cash; the remainder is on account.

b$.$ La Famiglia expects that, on average, $70\%$ of credit sales will be paid in the month of sale, and $28\%$ will be paid in the following month.

c$.$ Food and supplies purchases, all on account, are expected to be $$108,000.$ La Famiglia pays $25\%$ in the month of purchase and $75\%$ in the month following

d$.$ Most of the work is done by the owners, who typically withdraw $$6,000$ a month from the business as their salary. $($Note: The $$6,000$ is a payment in total not per person.$)$ Various part$-$time workers cost $$7,300$ per month. They are paid for their work weekly, so on average $90\%$ of their wages are paid in the the remaining $10\%$ in the next month.

e$.$ Utilities average $$5,950$ per month. Rent on the building is $$4,100$ per month.

f$.$ Insurance is paid quarterly; the next$-$payment of $$1,500$ is due in October.

g$.$ September sales were $$181,500$ and purchases of food and supplies in September equaled $$130,000.$

h$.$ The cash balance on October $1$ is $$2,147.$

Required:

If required, round your answers to the nearest dollar.

Calculate the cash receipts expected in October.

Calculate the cash needed in October to pay for food purchases.

$

Prepare a cash budget for the month of October.

La Famiglia Pizzeria

Cash budget

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