You own a new restaurant that is due to open on June 1 2008 The restaurant expects to take in $1,500 a day in sales revenue and is open seven days a week. Sales revenue is estimated to be 40 percent cash and 60 on credit card receivables it is estimated taht 88 percent of credit receivables will be collected in first part of the following month wages and salaries expense is expected to be 37 percent and cost of sales is 38 percent of sales revenue. both these expenses will be on a cash basis.other operating costs are estimated to be 10 percent of sales revenue. these costs will not have to be paid until the month fllowing the incurrance of the cost.

depreciation 1,800 a month, rent is 2000 a month payable in advance on the first of each month. Principal payments on a loan you made to get into business are $3,000 a month. The first payment is due on June 15. Interest expense of $300 will be paid each month. You have only $1000 cash on hand on June 1. You will not be able to borrow any more money, and you have no income of your own other than the money generated by your new restaurant venture.

a. Produce the budgeted income statement for the restaurant for the month of June

. b. Prepare the restaurants cash budget for the month of June.

c. Comment about the results shown by these two statements, with particular reference to any possible financial difficulties you might have. P11.5 A small hotel provided you with the following information for a three