Prepare a cash budget for Carla for the six months to 30th June m)●●●●●●●●●●●Carla has inherited a small café in the centre of town, worth £250,000 and plans to run itselling lunches and snacks.It has kitchen fixtures and fittings worth £100,000 and furniture etc valued at £4,000.She has savings of £5,000 which she will deposit into a business bank account in January andis in discussion with her bank to get a loan.They have asked her to prepare a business plan, including a cash budget for the coming sixmonths.Carla expects the café to draw customers straight away. Most customers will pay cashimmediately, but Carla intends to offer to sell on credit terms to local professional offices(accountants, solicitors etc) for staff lunches, meetings etcIShe reckons that her sales for the coming six months will be:+JanuaryFebruaryMarchAprilMayJune£6,0006,5007,0007,5007,5008,000The credit sales will be paid up in the month following sale.Carla will buy ingredients immediately before using them and the cost will be 50% of monthlysales. There will be negligible inventory on hand. (For example, in January, ingredients costswill be 6,000 50% = £3,000)Required:% credit sales0%5%5%10%10%10%Carla will employ a part-time assistant for the busiest times of the day and on Saturdays andhe will be paid £750 per month.She will need to buy a small delivery vehicle and has seen one advertised for £4,900. She willbuy it in February.Some of the furniture needs replacement and she thinks she will budget £800 for that inJanuary.Repairs, redecorating will be undertaken in January and February and be paid for in March.This will cost £2,000.Utility costs, including electricity, other utility bills etc are budgeted to be £1,800 a month.Business rates are £2,000 for the six months from April and are payable in April.Dronare a cash budget for Carla for the six months to 30th lunaFocus

Cash Budget - A cash budget is a projection of a company's cash flows over a given time frame. The…

Answered: fittings worth £100,000 and furniture…

fittings worth £100,000 and furniture etc valued at £4 which she will deposit into a business bank account in ank to get a loan.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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