Question

Roan's 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: Click the icon to view the information.) Requirements 1. Prepare schedules of (a) budgeted cash collections, (b) budgeted cash payments for purchases, and (c) budgeted cash payments for operating expenses. Show totals for each month and totals for January and February combined. 2. Prepare a combined cash budget. If no financing activity takes place, what is the budgeted cash balance on February 28? 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. Roan's Restaurant Supply Cash Collections Budget For the Months Ended January 31 and February 28 January February Total Cash sales Collection on credit sales Total cash collections 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. Roan's Restaurant Supply Cash Payments for Material Purchases Budget For the Months Ended January 31 and February 28 January February 30% of current month DM purchases Total 70% of last month's DM purchases Total cash payments

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Answer 1

Calculation Jan Jan Feb 64,000 Feb 69,000 Totals 133,000 Roan's Restaurant Supply Cash collections budget Req la Sales Cash Collections Cash sales Collections on credit sales 20% of Current Month Credit Sales 80% of Last Month Credit Sales Total Collections on credit sales 44,800 48,300 93,100 =64,000*70% =69,000*70% 3,840 12,960 16,800 4,140 15,360 19,500 7,980 28,320 36,300 =64,000*30%*20% =54,000*30%*80% =69,000*30%*20% =64,000*30%*80% Total cash collections 61,600 67,800 129,400 Jan Jan Feb 24,000 Feb 27,500 Totals 51,500 Cash payments budget for Purchases Req 1b Purchases Cash payments 30% of Current Month DM Purchases 70% of Last Month DM Purchases Total cash payments for purchases 7,200 17,850 25,050 8,250 16,800 25,050 15,450 34,650 50,100 =24,000*30% =25,500*70% =27,500*30% =24,000*70% Feb Totals Jan Feb 4,050 4,800 =54,000*15%*50% =64,000*15%*50% 4,800 5,175 9,975 4,050 9,600 5,175 18,825 =64,000*15%*50% =69,000*15%*50% 8,850 Operating Expenses Budget Req 1c Variable cash operating expenses Sales commission - Dec Sales commission - Jan Sales commission - Feb Total Variable cash operating expenses Fixed cash operating expenses Sales salaries - Dec Sales salaries - Jan Sales salaries - Feb Rent expense Tax expense Total Fixed cash operating expenses Total cash payments for operating expenses 4,000 4,500 =8,000*50% =9,000*50% 4,500 5,250 2,700 =9,000*50% =10,500*50% 2,700 11,500 22,700 31,550 4,000 9,000 5,250 5,400 11,500 35,150 53,975 12,450 22,425 22,000 61,600 83,600 Feb 27,000 67,800 94,800 Totals 22,000 129,400 151,400 Cash budget Req2 Beginning Cash balance Add Cash collections from customers Total cash available Less Cash payments Direct Materials purchases Operating expenses Total Cash payments Ending Cash balance 25,050 31,550 56,600 27,000 25,050 22,425 47,475 47,325 50,100 53,975 104,075 47,325 Budgeted cash balance on Feb 28 47,325