2. Aguadilla Pet Shop, Inc. has budgeted for the following cash flow. October November December Cash receipts $ 120,000 $ 130,000 $ 134,000 Cash payments Inventory purchases 100,000 110,000 90,000 Sales and adm. 30,000 35,000 28,000 On October 1 the cash balance is $ 10,000. The company wants to maintain a balance of $ 7,000. To maintain funds, he borrows in amounts of $ 1,000 and makes payments on the last day of each month. The interest rate is 1% per month. The company pays sellers on the last day of the month. The company has an opening balance on its credit line payable of $ 45,000. Prepare a cash budget.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
2. Aguadilla Pet Shop, Inc. has budgeted for the following
October November December
Cash receipts $ 120,000 $ 130,000 $ 134,000 Cash payments
Inventory purchases 100,000 110,000 90,000 Sales and adm. 30,000 35,000 28,000
On October 1 the cash balance is $ 10,000. The company wants to maintain a balance of $ 7,000. To maintain funds, he borrows in amounts of $ 1,000 and makes payments on the last day of each month. The interest rate is 1% per month. The company pays sellers on the last day of the month. The company has an opening balance on its credit line payable of $ 45,000.
Prepare a
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