$16,000 The financial information for the Soliz Caf is as follows: Budgeted Cash sales Charge sales August $32,000 September 26,500 13,000 October 28,000 13,000 November 28,000 12,000 December 30,000 15,000 Collection on charge sales averages 60 percent in the month following the sale, and the remaining 40 percent in the month following that. Purchases (cost of sales) avenge 35 percent of total revenue. Of that, 100 percent is paid in the month following purchase Payroll is on a cash basis and is forecasted to be: Management 581 October November $15,000 15,500 December 16,000 Other budgeted expenses are as follows: October November December Rent $2,600 $2,600 $2,600 Insurance 200 200 200 Energy costs 400 500 600 Depreciation 900 900 900 Loan interest 400 400 400 Other expenses 1,200 1,000 1,400 The rent, energy costs, loan interest, and other expenses are paid in cash each month as the expense is occurred. The insurance expense is paid in November each year for the entire year ($2,400). The restaurant is making monthly payments of principal toward a bank loan. The amount is $1,000 per month. New equipment is to be purchased in November. The cash cost will be $6,600. At the same time, old equipment will be sold. The estimated gain on the sale is expected to be $800. The old equipment has a net book value of $1,200 and is to be sold for cash. In December the restaurant owner plans to pay a Christmas bonus to his staff in the amount of $5,000. Required: Prepare the restaurant's cash budget for the months of October, November, and December. Assume the opening bank balance on October 1 is $3,000. 21