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Bretts Restaurant Supply is preparing its cash budgets for the first two months of the upcoming year. Here is the informatioJanuary February Variable cash operating expenses: Sales commissions: December Sales commissions: January Sales commissions:Requirement 2. Prepare the cash budget for January and February. Combined Cash Budget January February Cash balance, beginninData Table a. Sales are 75% cash and 25% credit. Credit sales are collected 20% in the month of sale and the remainder in the

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Cash collection budget
January February
Cash sales $ 48,000.00 $ 52,500.00
Credit sales $ 13,600.00 $ 16,300.00
Total cash collection $ 61,600.00 $ 68,800.00
Workings
Particulars January February
Sales $ 64,000.00 $ 70,000.00
Credit sales $ 16,000.00 $ 17,500.00
Collection for :
December $ 10,400.00
January $   3,200.00 $ 12,800.00
February $               -   $   3,500.00
$ 13,600.00 $ 16,300.00
Cash payment for material purchases budget
January February
December purchases $ 13,800.00 $               -  
January purchases $   8,000.00 $ 12,000.00
February purchases $               -   $ 11,200.00
Total cash payment $ 21,800.00 $ 23,200.00
Variable cash operating expenses:
January February
Sales commission, December $   2,600.00 $               -  
Sales commission, January $   3,200.00 $   3,200.00
Sales commission, February $               -   $   3,500.00
Total variable cash operating expense $   5,800.00 $   6,700.00
Fixed cash operating expenses:
Sales salaries, December $   3,500.00 $               -  
Sales salaries, January $   4,000.00 $   4,000.00
Sales salaries, February $               -   $   4,750.00
Rent expense $   2,700.00 $   2,700.00
Tax expense $ 12,000.00 $               -  
Total fixed cash operating expense $ 22,200.00 $ 11,450.00
Total cash payment for operating expenses $ 28,000.00 $ 18,150.00
Combined cash budget
January February
Cash balance, beginning $ 18,000.00 $ 29,800.00
Cash collections from customers $ 61,600.00 $ 68,800.00
Total cash available $ 79,600.00 $ 98,600.00
Less: Cash payments
Direct material purchases $ 21,800.00 $ 23,200.00
Operating expense $ 28,000.00 $ 18,150.00
Total cash payments $ 49,800.00 $ 41,350.00
Ending cash balance $ 29,800.00 $ 57,250.00
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