Star Caf & Restaurant is situated in a local shopping center and serves food of many different cultures. It also caters private functions of companies. The results of operations for the fourth quarter of 2023 are as follows:

Star Caf & Restaurant Income Statement For the Fourth Quarter, 2023

Sales $ 655,000, Cost of Sales $ 425,000, Gross Margin $ 230,000, Selling, General & Administrative Expenses $ 75,500, Income before taxes $ 154,500, Income Taxes $ 61,800, Net Income $ 92,700.

Additional Information: 1) Sales and cost of sales are expected to increase by 15% in each of the next two quarters. 2) 80% of sales are collected in the quarter of sale and 20% are collected in the quarter following sale. 3) Food purchases in the fourth quarter of 2023 are $ 375,000. 4) Food inventory at the end of 2023 is $42,000. For 2024, the company plans to hold ending inventory equal to 30% of the next quarters cost of sales. 5) Selling, general, and administrative expenses are expected to increase by $ 15,000 due to increases in advertising and salaries. All other expenses in this category are expected to remain constant. 6) 75% of inventory purchases are paid in the quarter of purchase and 25% are paid in the following quarter. All other expenses, including taxes, are paid in the quarter incurred. 7) Selling and administrative expense includes $5,000 of depreciation related to fixtures and equipment. 8) The tax rate is expected to remain at 40% 9) The cash balance at the end of 2023 is $ 35,750.

Required: a) Prepare a budgeted income statement for the first quarter of 2024. b) Prepare a purchases budget for the first quarter of 2024. c) Prepare a cash budget for the first quarter of 2024.

Star Caf \& Restaurant is situated in a local shopping center and serves food of many different cultures. It also caters private functions of companies. The results of operations for the fourth quarter of 2023 are as follows: Additional Information: 1) Sales and cost of sales are expected to increase by 15% in each of the next two quarters. 2) 80% of sales are collected in the quarter of sale and 20% are collected in the quarter following sale. 3) Food purchases in the fourth quarter of 2023 are $375,000. 4) Food inventory at the end of 2023 is $42,000. For 2024 , the company plans to hold ending inventory equal to 30% of the next quarter's cost of sales. 5) Selling, general, and administrative expenses are expected to increase by $15,000 due to increases in advertising and salaries. All other expenses in this category are expected to remain constant. 6) 75% of inventory purchases are paid in the quarter of purchase and 25% are paid in the following quarter. All other expenses, including taxes, are paid in the quarter incurred. 7) Selling and administrative expense includes $5,000 of depreciation related to fixtures and equipment. 8) The tax rate is expected to remain at 40% 9) The cash balance at the end of 2023 is $35,750. Required: a) Prepare a budgeted income statement for the first quarter of 2024. b) Prepare a purchases budget for the first quarter of 2024. c) Prepare a cash budget for the first quarter of 2024 . MARKING 1) Formatting/Professionalism: The spreadsheet has exceptional formatting, and the information is well organized. Easy/logical to read, \% vs \$ vs given \# formatting etc. (including the format of the file name, as instructed above) - 2 marks 2) Attention to Detail: Followed all instructions for each part and input those instructions accurately - 3 marks 3) Accuracy of numbers: Results are correct, formulas are well-developed and will correctly determine the needed information - 15 marks