finance La Famiglia Pizzeria provided the following information for the month of October:
a. Sales are budgeted to be $157,000. 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$116,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase.
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 to the two owners, 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 is paid in the month incurred and 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$1,200 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.
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. 23rd Edition•ISBN: 9781305575080David Twomey, Marianne Jennings, Stephanie Greene 13th Edition•ISBN: 9780321924957Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett 13th Edition•ISBN: 9780135225691 (1 more)Michael R Solomon 1st Edition•ISBN: 9780078953125 (1 more)Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese