1. The following information in respect of a restaurant was provided:

	Budgeted cash revenue $	Budgeted credit revenue $
August	30,800	17,000
September	30,000	15,000
October	28,400	14,000
November	25,600	13,000
December	32,900	16,800

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 30 percent of total sales revenue. 40 percent of cost of sales is on a cash basis, and the remaining is paid in the month following purchase.
3. Payroll costs, which are paid on a cash basis, are forecast to be $14,350 for October, $13,980 for November, and $13,420 for December.
4. Other budgeted expenses according to the forecast income statement follows:

	October $	November $	December $
Rent expense	3,100	3,100	3,100
Utilities expense	900	950	1,050
Other operating costs	1,300	980	1,460
Depreciation (equipment)	4,800	4,800	4,800
Interest expense	700	700	700

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 $2,890 from the sale. At the same time, it must spend $3,600 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.
6. The beginning cash balance for October is $21,870.

Required:

(a) Prepare the cash budget for each of the three months October, November, and December. (b) Briefly explain the main source of cash receipt and cash payment of a restaurant.

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