La Famiglia Pizzeria provided the following information for the month of October: Sales are budgeted to be $166,000. About 85% of sales is cash; the remainder is on account. 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. Food and supplies purchases, all on account, are expected to be $118,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase. 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 are paid in the month incurred and the remaining 10% in the next month. Utilities average $5,950 per month. Rent on the building is $4,100 per month. Insurance is paid quarterly; the next payment of $1,200 is due in October. September sales were $181,500 and purchases of food and supplies in September equaled $130,000. The cash balance on October 1 is $2,147. Required: If required, round your answers to the nearest dollar. 1. Calculate the cash receipts expected in October. $fill in the blank 1831ca098fb4fa7_1 2. Calculate the cash needed in October to pay for food purchases. $fill in the blank 1831ca098fb4fa7_2 3. Prepare a cash budget for the month of October. La Famiglia Pizzeria Cash budget For the month of October Beginning balance $fill in the blank a7010904605601d_1 Cash receipts fill in the blank a7010904605601d_2 Cash available $fill in the blank a7010904605601d_3 Less: Payments for food and supplies purchases $fill in the blank a7010904605601d_4 Owners' draw fill in the blank a7010904605601d_5 Workers' wages fill in the blank a7010904605601d_6 Utilities fill in the blank a7010904605601d_7 Rent fill in the blank a7010904605601d_8 Insurance fill in the blank a7010904605601d_9 Total disbursements $fill in the blank a7010904605601d_10 Ending balance $fill in the blank a7010904605601d_11

La Famiglia Pizzeria provided the following information for the month of October: Sales are budgeted to be $166,000. About 85% of sales is cash; the remainder is on account. 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. Food and supplies purchases, all on account, are expected to be $118,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase. 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 are paid in the month incurred and the remaining 10% in the next month. Utilities average $5,950 per month. Rent on the building is $4,100 per month. Insurance is paid quarterly; the next payment of $1,200 is due in October. September sales were $181,500 and purchases of food and supplies in September equaled $130,000. The cash balance on October 1 is $2,147. Required: If required, round your answers to the nearest dollar. 1. Calculate the cash receipts expected in October. $fill in the blank 1831ca098fb4fa7_1 2. Calculate the cash needed in October to pay for food purchases. $fill in the blank 1831ca098fb4fa7_2 3. Prepare a cash budget for the month of October. La Famiglia Pizzeria Cash budget For the month of October Beginning balance $fill in the blank a7010904605601d_1 Cash receipts fill in the blank a7010904605601d_2 Cash available $fill in the blank a7010904605601d_3 Less: Payments for food and supplies purchases $fill in the blank a7010904605601d_4 Owners' draw fill in the blank a7010904605601d_5 Workers' wages fill in the blank a7010904605601d_6 Utilities fill in the blank a7010904605601d_7 Rent fill in the blank a7010904605601d_8 Insurance fill in the blank a7010904605601d_9 Total disbursements $fill in the blank a7010904605601d_10 Ending balance $fill in the blank a7010904605601d_11

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P

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Question

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

Sales are budgeted to be $166,000. About 85% of sales is cash; the remainder is on account.
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.
Food and supplies purchases, all on account, are expected to be $118,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase.
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 are paid in the month incurred and the remaining 10% in the next month.
Utilities average $5,950 per month. Rent on the building is $4,100 per month.
Insurance is paid quarterly; the next payment of $1,200 is due in October.
September sales were $181,500 and purchases of food and supplies in September equaled $130,000.
The cash balance on October 1 is $2,147.

Required:

If required, round your answers to the nearest dollar.

1. Calculate the cash receipts expected in October.
$fill in the blank 1831ca098fb4fa7_1

2. Calculate the cash needed in October to pay for food purchases.
$fill in the blank 1831ca098fb4fa7_2

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

La Famiglia Pizzeria
Cash budget
For the month of October
Beginning balance	$fill in the blank a7010904605601d_1
Cash receipts	fill in the blank a7010904605601d_2
Cash available	$fill in the blank a7010904605601d_3
Less:
Payments for food and supplies purchases	$fill in the blank a7010904605601d_4
Owners' draw	fill in the blank a7010904605601d_5
Workers' wages	fill in the blank a7010904605601d_6
Utilities	fill in the blank a7010904605601d_7
Rent	fill in the blank a7010904605601d_8
Insurance	fill in the blank a7010904605601d_9
Total disbursements	$fill in the blank a7010904605601d_10
Ending balance	$fill in the blank a7010904605601d_11

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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