7) Ehrlich Corporation has projected sales in units for the third quarter of the coming year as follows: July 50,000 August 40,000 September 60,000 All units are sold on account for $14 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. May sales were $900,000 and June sales were $1,025,000 Required: a. Prepare a schedule for the third quarter, showing budgeted cash receipts for Ehrlich Corporation.
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.
7) Ehrlich Corporation has projected sales in units for the third quarter of the coming year as follows:
July 50,000
August 40,000
September 60,000
All units are sold on account for $14 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. May sales were $900,000 and June sales were $1,025,000
Required:
a. Prepare a schedule for the third quarter, showing budgeted cash receipts for Ehrlich Corporation.
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