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Hudson's Breakfast Caf is a small caf near a park. Management has asked that a cash budget be prepared for the upcoming year. The following
Hudson's Breakfast Caf is a small caf near a park. Management has asked that a cash budget be prepared for the upcoming year. The following is the company's budgeted information for the 2020 fiscal year. Additional information is as follows: - Hudson requires the ending cash balance for each period to be at a minimum of $5,000. The ending cash balance - All sales are on credit. The collection pattern for sales is 80% in the quarter of sale, 20% in the following quarter. - There were no outstanding accounts receivable as at Q4-2019. - Food inventory is paid for in full in the quarter following the purchase. - The total purchases in Q4-2019 were $9,200. - All other expenses will be paid in full in the quarter they are budgeted for. - Equipment costing a total of $15,000 is to be purchased in the year; $8,000 will be paid in Q2 and $7,000 in Q3. - Dividend payments of $3,000 are to be paid in Q3 and $3,500 in Q4. - Hudson has an open line of credit that is used for any borrowings the company may need. Any borrowings are done in multiples of $1,000. a) Complete a schedule of cash receipts for the 2020 fiscal year. b) Prepare a cash budget for the 2020 fiscal year
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