Nolan's Restaurant Supply is preparing its cash budgets for the first two months of the upcoming year. Here is the information about the company's upcoming cash receipts and cash disbursements: (Click the icon to view the information.) Requirements 1. Prepare schedules of (a) budgeted cash collections, (b) budgeted cash payments for purchases, and (c) budgeted cash payments for operating expenses. Show totals for each month and totals for January and February combined Prepare a combined cash budget. If no financing activity takes place, what is the budgeted cash balance on February 28? 2. More Info Sales are 60% cash and 40% credit. Credit sales are collected 20% in the month of sale ard the remainder in the month after sale. Actual sales in December were $51,000. Schedules of budgeted sales for the two months of the a upcoming year are as follows: Budgeted Sales Revenue $58,000 $72,000 January February Actual purchases of direct materials in December were $25,500. The company's purchases of direct materials in January are budgeted to be $21,500 and $27,500 in February. All purchases are paid 50% in the month of purchase and 50% the following month. b. c. Salaries and sales commissions are also paid half in the month earned and half the next month. Actual salaries were $9,500 in December. Budgeted salaries in January are $10,500 and February budgeted salaries are $12,000. Sales commissions each month are 15% of that month's sales. Rent expense is $3,500 per month. Depreciation is $2,100 per month. d. e. imated income tax payments are made at the end of January. The estimated tax payment is projected to be $13,000 The cash balance at the end of the prior year was $18,000 g. Cash Collections Budget 31 and F 28 Cash sales tion on credit sales b. Prepare a schedule of budgeted cash payments for purchases for January and February. Show totals for each month and totals for January and February combined Nolan's Restaurant Supply Cash Payments for Material Purchases Budget For the Months Ended January 31 and February 28 Total February January 50% of current month DM purchases 50% of last month's DM purchases Total cash payments Nolan Restaurant Supply Cash Payments for Operating Expenses Budget For the Months Ended January 31 and February 28 February Total January Variable cash operating expenses: Sales commissions: December Sales commissions: January Sales commissions: February Total variable cash operating expenses Fixed cash operating expenses: Sales salaries: December Sales salaries: January Sales salaries: February Rent expense Tax expense Total fixed cash operating expenses Total cash payments for operating expenses January February 2 months Beginning cash balance Plus: Cash collections from customers Total cash available Less cash payments: Direct materials purchases Operating expenses Total cash payments Ending cash balance
