Cash Budget - Rob
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Rob runs a small family restaurant that operates on a cash basis. All sales are for cash, but materials necessary to the preparation of meals and drinks are bought on trade credit terms of 2/30 net 60.
Sales forecast for the next six months is:
Jan 25000
Feb 30000
Mar 40000
Apr 50000
May 30000
Jun 25000
Material costs are about 20% of sales.
Labor is fixed at $10,000.00 per month and must be paid.
Rent is $1,550.00 per month.
Purchases in December were $6,000.00.
Taxes must be paid in January and are $12,000.00
Beginning cash in Jan above was $10,000.00
Target cash balance is $10,000.00
Prepare a cash budget assuming that Rob takes the discount for the months of Jan through June. Show all work.
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Solution Summary
This solution prepares a cash budget under the assuming that there will be a discount taken.
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Please see the attached file.
Cash Budget for Six months ending 30th June
Jan Feb Mar Apr May Jun
Cash Balance in the beginning $10,000 $10,000 $20,120 $43,190 $74,300 $83,450
Cash collection from $25,000 $30,000 40000 50000 30000 25000
Sales
(a)Total receipts $35,000 ...
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