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Annie's Homemade Ice Cream is preparing a cash budget for May. Its beginning cash balance is $ 6 0 , 0 0 0 and May's
Annie's Homemade Ice Cream is preparing a cash budget for May. Its beginning cash balance is $ and May's estimated gross cash receipts from customers are $ The company's estimated cash disbursements are summarized as follows:
A total of of the gross cash receipts come from customers who pay with a credit card instead of cash. Annie's pays a credit card processing fee equal to of the gross cash receipts it charges to a credit card. At the end of each day, all cash associated with credit card purchases funnels into Annie's Homemade's bank account. In other words, there are no accounts receivable at the end ofreach day.
The gross cash receipts include two components gross sales, and sales tax equal to of gross sales.
Annie's pays a franchise fee equal to of gross sales, where gross sales are defined as gross cash receipts minus sales tax.
Ingredient costs are of gross sales and the company's beginning and ending inventories do not change.
The labor cost incurred and paid in May including both salaried and hourly employees is $
Other cash disbursements including rent, utilities, payroll processing, liability insurance, website hosting and maintenance, social media management, etc. are $ per month.
In addition, Annie's has $ in noncurrent assets that it depreciates over a fiveyear useful life with no salvage value.
Required:
Prepare a cash budget for May.
What is May's estimated net operating cash inflow outflow
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