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# 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.

#### Solution Preview

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 ...

#### Solution Summary

This solution prepares a cash budget under the assuming that there will be a discount taken.

\$2.49