Project #69751 - Cash Flow Budget

ou have opened your own restaurant and cannot quite afford an accountant yet, so you are taking the financial work on yourself. As a new business, you are quite concerned with your cash flow situation. You have gathered the following facts, which will enable you to prepare a cash budget.

  • Sales revenue in November was $70,000.
  • Purchases (cost of sales) in November were $28,000.
  • Sales revenue is 38% cash, with the remaining 62% being credit card sales. In the month of sales, 95% is collected, and the remaining 5% is collected early the next month. For inventory purchases, you pay 25% in the month of the purchase, and the remaining 75% is paid in the following month.
  • Your condensed budgeted income statement for December is as follows:

Sale revenue

 

$77,000

Cost of sales

$29,000

 

Wages expense

24,000

 

Operating expenses

13,000

 

Rent expenses

6,000

 

Depreciation expenses

2,500

 

Total expenses

 

(74,500)

Operating income

 

$2,500

  • The wages and operating expense will be paid in December. Rent was prepaid in January for the entire year. The November ending cash is $6,000.

You need to prepare a cash budget for the month of December. Provide an explanation of any amounts not used.

An Excel template will be provided by the instructor.

Subject Mathematics
Due By (Pacific Time) 05/04/2015 10:00 am
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