Old university friends and film fans Helen, Judy and Meryl run an independent cinema with a very
different offering from the large cinema chains. The one-screen cinema seats 250 people on two
levels. It attracts audiences who enjoy the experience of watching old and new films in an original
1930s cinema. The cinema offers luxurious d\u00e9cor, table seating and a wine list for the audience. The
friends decide to prepare a cash budget for the coming months. They want to see if they can pay off
their overdraft which at the end of August 2021 was \u00a3124,890. They gather the following information:
Tickets for downstairs table seating (40% of seats) are priced at \u00a311 and upstairs seats (60%
of seats) priced at \u00a39.
The cinema is usually 80% full every month. In October, they expect a 10% fall in ticket sales,
for just this month.
During the months September to December the expected number of film showings will be 30,
35, 30, 35 each month respectively. In August 35 films were shown.
Season tickets cost \u00a3150 and holders can watch one free film per week for a year. These are
only available to buy in November and they hope to sell 25 season tickets this year.
It is estimated that for every \u00a31 the customer spends on a film ticket \u00a30.40 is spent on food
and drink. The food and drink cost the cinema 40% of the food and drink spend. This cost is
paid to food and drink suppliers in the month following the sale. (Season tickets can be ignored
when considering food and drink).
Licensing is complex:
o Annual license fee of \u00a31,000 paid in Oct
o A fixed fee of \u00a385 per film shown
o 35% of ticket sales go to the film distributor in the month following sale
Other expenses of \u00a317,000 per month are paid in the month incurred
Required:
a) Prepare a cash budget for the months Sep, Oct, Nov and Dec 2021. State if, and when the
overdraft will be paid off. For now, assume this is business as usual pre-Covid (i.e., there have
been no Covid effects). <\/p>\n","protected":false},"excerpt":{"rendered":"
Old university friends and film fans Helen, Judy and Meryl run an independent cinema with a very different offering from the large cinema chains. The one-screen cinema seats 250 people on two levels. It attracts audiences who enjoy the experience of watching old and new films in an original 1930s cinema. The cinema offers luxurious […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[15],"class_list":["post-55849","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-business"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/55849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=55849"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/55849\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=55849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=55849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=55849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}