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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 $$152,000.$ 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 $$110,000.$ 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 $$1,500$ 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 ab$8$cf$6$f$8$bfd$805$c$\_1$

$255,850$

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

$fill in the blank ab$8$cf$6$f$8$bfd$805$c$\_2$

$125,000$

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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 $40868$e$019075$fd$7\_1$

$2,147$

Cash receipts fill in the blank $40868$e$019075$fd$7\_2$

$255,850$

Cash available $fill in the blank $40868$e$019075$fd$7\_3$

$257,997$

Less:

Payments for food and supplies purchases $fill in the blank $40868$e$019075$fd$7\_4$

$125,000$

Owners' draw fill in the blank $40868$e$019075$fd$7\_5$

$6,000$

Workers' wages fill in the blank $40868$e$019075$fd$7\_6$

$7,300$

Utilities fill in the blank $40868$e$019075$fd$7\_7$

$5,950$

Rent fill in the blank $40868$e$019075$fd$7\_8$

$4,100$

Insurance fill in the blank $40868$e$019075$fd$7\_9$

$1,500$

Total disbursements $fill in the blank $40868$e$019075$fd$7\_10$

$150,050$

Ending balance $fill in the blank $40868$e$019075$fd$7\_11$

$107,947$