Restaurant Supply is preparing

Restaurant Supply is preparing its cash budgets for the first two months of the upcoming year. Here is the information about the company’s upcoming cash receipts and cash​ disbursements:

a.
Sales are

70​%

cash and

30​%

credit. Credit sales are collected

30​%

in the month of sale and the remainder in the month after sale. Actual sales in December were

$56,000.

Schedules of budgeted sales for the two months of the upcoming year are as​ follows:

 
 
Budgeted Sales Revenue
January. . . . . . . . . . . . . . .
 
$61,000
February. . . . . . . . . . . . . .
 
$72,000
 
b.
Actual purchases of direct materials in December were

$24,500.

The​ company’s purchases of direct materials in January are budgeted to be

$20,000

and

$26,500

in February. All purchases are paid

30​%

in the month of purchase and

70​%

the following month.

c.
Salaries and sales commissions are also paid half in the month earned and half the next month. Actual salaries were

$10,000

in December. Budgeted salaries in January are

$11,000

and February budgeted salaries are

$12,500.

Sales commissions each month are

10​%

of that​ month’s sales.

d.
Rent expense is

$3,100

per month.

e.
Depreciation is

$2,400

per month.

f.
Estimated income tax payments are made at the end of January. The estimated tax payment is projected to be

$13,500.
g.
The cash balance at the end of the prior year was

$18,000.
Requirement 1a. Prepare a schedule of budgeted cash collections for January and February. Show totals for each month and totals for January and February combined.
 
Gary’s Restaurant Supply
Cash Collections Budget
For the Months Ended January 31 and February 28
 
January
Cash sales
 
Collection on credit sales
 
Total cash collections
 
February
 
 
 
Total
 
 
 
b. Prepare a schedule of budgeted cash payments for purchases for January and February. Show totals for each month and totals for January and February combined.
 
Gary’s Restaurant Supply
Cash Payments for Material Purchases Budget
For the Months Ended January 31 and February 28
 
January
30% of current month DM purchases
 
70% of last month’s DM purchases
 
Total cash payments
 
February
 
 
 
Total
 
 
 
c. Prepare a schedule of budgeted cash payments for operating expenses for January and February. Show totals for each month and totals for January and February combined. ​(If a box is not used in the table leave the box​ empty; do not enter a zero. Round all amounts to the nearest​ dollar.)
  
Gary Restaurant Supply
Cash Payments for Operating Expenses Budget
For the Months Ended January 31 and February 28
 
January
Variable cash operating expenses:
 
Sales commissions: December
 
Sales commissions: January
 
Sales commissions: February
 
Total variable cash operating expenses
 
Fixed cash operating expenses:
 
Sales salaries: December
 
Sales salaries: January
 
Sales salaries: February
 
Rent expense
 
Tax expense
 
Total fixed cash operating expenses
 
Total cash payments for operating expenses
 
February
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Requirement 2. Prepare a combined cash budget for January and February. If no financing activity takes​ place, what is the budgeted cash balance on February​ 28?
 
Gary’s Restaurant Supply
Combined Cash Budget
For the Months Ended January 31 and February 28
 
January
February
2 months
Beginning cash balance
 
 
 
Plus: Cash collections from customers
 
 
 
Total cash available
 
 
 
Less cash payments:
   
 
Direct materials purchases
 
 
 
Operating expenses
 
 
 
Total cash payments
 
 
 
Ending cash balance
 
 
 

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