Prepare a cash budget for the month the beginning cash

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Reference no: EM13570801

You decide to open a small business in Charleston SC that will cater primarily to busy downtown workers. Gourmet box lunches with a minimun order of 5 lunches. charge for lunch is $7.25 per box. cost of each lunch is $3.25. your salary each month is $1100. your assistant will make $7.75 per hour for a 20 hour work week, assume a 4 week month, treat this as a fixed cost. Advertising will be 5% of your monthly revenue, treat as fixed cost, advertising costs are paid in the month incurred. Rent expense is $400 per month, payable on first day of month. phone is $95 per month, payment for current month will occur in the next month when bill is received. Receive electric bill on last day of month payable on the 20th of the following month was for $325, treat as fixed cost. Sales are primarily cash but few clients have credit so 12% of total sales will be collected in the next month. Because this is the first month of operations, there are no outstanding accounts receivable. A delivery truck is leased for 2 years at $375 per month with variable operating cost of operating truck is $0.45 per lunch delivered. Lease payment is due at first of month and all variable costs are paid as incurred. You invested $6,000 of your own money to get business started but with start up costs has a cash balance at the beginning of the first month operations of $2800.

Requirements:

1.Based on data above prepare an accural basis income statement based on budgeted sales of 1090 gourmet box lunches.

2.Contribution format income statement: based on data above, use infro from #1, each item should be identified as variable, mixed, and fixed. A mixed cost will appear twice-once as a variable cost and once as a fixed cost item. Clearly identifiy each of the itmes you include in this income statement. should have three columns: total, per unit, and percentage.

3.Cash budget with supporting schedules: prepare a schedule of expected cash collections for the month, no accounts receivables outstanding. Prepare a schedule of cash disbursements for merchandise purchases (food items) for the month.

Prepare a cash budget for the month: the beginning cash balance is $2800. the company must maintain a cash balance of $2500. an open line of credit has been established.

Reference no: EM13570801

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