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Preparing a Cash Budget

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

Sales are budgeted to be $165,000. 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 $101,000. 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 $1,300 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:

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If required, round your answers to the nearest dollar.

1. Calculate the cash receipts expected in October. $fill in the blank c584bdfa9fee039_1

2. Calculate the cash needed in October to pay for food purchases. $fill in the blank c584bdfa9fee039_2

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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 f8b61a040fb903c_1
Cash receipts	fill in the blank f8b61a040fb903c_2
Cash available	$fill in the blank f8b61a040fb903c_3
Less:
Payments for food and supplies purchases	$fill in the blank f8b61a040fb903c_4
Owners' draw	fill in the blank f8b61a040fb903c_5
Workers' wages	fill in the blank f8b61a040fb903c_6
Utilities	fill in the blank f8b61a040fb903c_7
Rent	fill in the blank f8b61a040fb903c_8
Insurance	fill in the blank f8b61a040fb903c_9
Total disbursements	$fill in the blank f8b61a040fb903c_10
Ending balance	$fill in the blank f8b61a040fb903c_11