On average, 60% of Caf Vert's sales are for immediate cash settlement, with the remaining 40%...
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On average, 60% of Caf Vert's sales are for immediate cash settlement, with the remaining 40% being for credit. Of these credit sales, 50% are normally received in the month of sale, 25% in the following month and 20% in the month following that. Simone estimates that typically 5% of the credit sales will never be received and will have to be treated as 'bad' debts; (ii) Generally, the restaurant pays for 80% of its inventory purchases in the month of purchase, with the other 20% being paid in the month following purchase; (iii) Payroll expenses are always paid in the month they are incurred, as are owner's drawings; (iv) Other expenses, meanwhile, are paid 30% in the month they are incurred, and 70% in the following month; (v) Simone estimates that the balance in the business bank account will be 5,000 at 1 April 2021. Prepare a cash budget for Caf Vert for the three months beginning 1 April 2021 and advise Simone as to her options with regard to purchasing the new furniture and kitchen equipment. On average, 60% of Caf Vert's sales are for immediate cash settlement, with the remaining 40% being for credit. Of these credit sales, 50% are normally received in the month of sale, 25% in the following month and 20% in the month following that. Simone estimates that typically 5% of the credit sales will never be received and will have to be treated as 'bad' debts; (ii) Generally, the restaurant pays for 80% of its inventory purchases in the month of purchase, with the other 20% being paid in the month following purchase; (iii) Payroll expenses are always paid in the month they are incurred, as are owner's drawings; (iv) Other expenses, meanwhile, are paid 30% in the month they are incurred, and 70% in the following month; (v) Simone estimates that the balance in the business bank account will be 5,000 at 1 April 2021. Prepare a cash budget for Caf Vert for the three months beginning 1 April 2021 and advise Simone as to her options with regard to purchasing the new furniture and kitchen equipment.
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Answer rating: 100% (QA)
Here is the cash budget for Caf Vert for April May and June 2021 Caf Vert Cash Budget April 2021 Jun... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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