The following information in respect of a restaurant was provided:

	Budgeted cash revenue $	Budgeted credit revenue $
August	30,300	16,000
September	29,500	14,000
October	27,900	13,000
November	25,100	12,000
December	32,400	15,800

1. Collections on credit revenue is 80 percent in the month following the sales and the remaining in the month following.

2. Cost of sales (purchases) is 75 percent of total sales revenue. 60 percent of cost of sales is on a cash basis.

3. Payroll costs, which are paid on a cash basis, are forecast to be $13,100 for October, $12,700 for November, and $12,200 for December.

4. Other budgeted expenses according to the forecast income statement follows:

	October $	November $	December $
Rent expense	2,500	2,500	2,500
Utilities expense	500	450	550
Other operating costs	1,100	900	1,300
Depreciation (equipment)	4,600	4,600	4,600
Interest expense	400	400	400

Note that the rent, utilities, other operating costs, and interest are paid in cash each month as the expense is incurred.

In December, the restaurant plans to sell off some old equipment and estimates it will receive $1,500 from the sale. At the same time, it must spend $5,400 on new equipment.

5. If there is sufficient cash on hand, the owner plans to pay a bonus to the staff, amounted to $3,000 which will be paid in December.

vi. The beginning cash balance for October is $22,410.

Required:

1. Prepare the cash budget for each of the three months October, November, and December.

2. Briefly explain the main source of cash receipt and cash payment of a restaurant.

3. Identify all FOUR (4) accounts classified under the cash conversion.