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SE$7\mathrm{.}32$ Preparing a cash budget

Trios

SUTMREASE $7$RTII

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

a Sales are budgeted to be $$157000.$ About $85$ per cent of sales are cash; the remainder are on account.

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

c Food and supplies purchases, all on account, are expected to be $$116000.$ La Famiglia pays $25$ per cent in the month of purchase and $75$ per cent in the month following purchase.

d Most of the work is done by the owners, who typically withdraw $$6000$ a month from the business as their salary. INote: The $$6000$ is a payment in total to the two owners, not per person.$)$ Various part$-$time workers cost $$7300$ per month. They are paid for their work weekly. so on average $90$ per cent of their wages are paid in the month incurred and the remaining $10$ per cent in the next month.

e Utilities average $$5950$ per month. Rent on the building is $$4100$ per month.

f Insurance is paid quarterly; the next payment of $$1200$ is due in October.

g September sales were $$181500$ and purchases of food and supplies in September equalled $$130000.$

$h$ The cash balance on $1$ October is $$2147.$

Required:

$1$ Calculate the cash receipts expected in October. $($Hint: Remember to include both cash sales and payments from credit sales.$)$

$2$ Calculate the cash needed in October to pay for food purchases.

$3$ Prepare a cash budget for the month of October.

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