Pratt's Pizza Inc. is a small chain of take-out pizza restaurants. The average selling price of a Pratt's pizza is $15. Pratt's estimated sales for the first five months of the 2020 fiscal year are as follows. Month January February March April May required a) Prepare the sales budget for the first quarter, number of Pizzas 15,000 18,000 21,000 27,000 25,000 b) The average cost of a pizza is $6. Opening food inventory for the year is estimated to be $9,000. When compiling the annual budget, the operations manager insists that 10% of next month's requirements should be on hand to begin each month. Prepare the purchases budget for the first quarter. c) Pratt's sales history indicates that 10% of sales will be for cash and 90% of sales will be on credit card. Using the information from the sales budget, determine the forecasted cash and credit sales. Pratt's has reviewed past collection history and has determined that credit card sales will be collected as follows: 90% is collected in the month of sale and 10% is collected the following month. The total credit card sales for the month of December 31, 2019, were $250,000. Prepare the cash collection per month section of the cash receipts budget worksheet for the first quarter. d) Pratt's will pay for 70% of its purchases of food inventory in the month of purchase and the remaining 30% in the following month. The total inventory purchases for the month of December 31, 2019, were $95,000. Prepare the budgeted schedule of cash payments for the first quarter. e) Prepare a cash budget for the first quarter. Assume the following: 1. Pratt's started the year with $20,000 in its bank account and must maintain a minimum cash balance of $10,000 at the end of each month.. 2. Pratt's has access to an open line of credit with the bank to borrow money if needed. To keep things simple, ignore interest calculations on the bank borrowings. Also, loan borrowings are taken in multiples of $1,000. 3. Pratt's maintains that it will repay debts as soon as possible with any excess cash that becomes available. 4. Pratt's has budgeted the following for 2020: Payment for operating expenses = $80,000 each month. Depreciation expense is $5,400 a month. Pratt's will need to purchase new ovens. The total cost of the ovens is $180,000. Pratt's will pay $100,000 in January and $80,000 in February. Cash dividends of $10,000 will be paid to shareholders in February and March. .