A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of $7,000 to start each quarter. Required: Fill in the missing amounts. Note: Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign. Quarter (000 omitted) (000 omitted) Year 2 3 Cash balance, beginning $ Add collections from customers 105 378 Total cash available 91 Less disbursements: Purchase of inventory 44 54 28 Selling and administrative expenses 32 30 124 Equipment purchases 8 8 19 45 Dividends 2 2 2 2
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.
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A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of
$7,000 to start each quarter.
Required:
Fill in the missing amounts.
Note: Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.
Quarter (000 omitted)
(000 omitted)
1
2
3
4
Year
Cash balance, beginning
$
7
Add collections from customers
105
378
Total cash available
91
Less disbursements:
Purchase of inventory
44
54
28
Selling and administrative expenses
32
30
124
Equipment purchases
8
8
19
45
Dividends
2
2
2
2
Total disbursements
96
Excess (deficiency) of cash available over disbursements
(2)
12
Financing:
Borrowings
8
$
(13)
Repayments (including interest) "
Total financing
Cash balance, ending
*Interest will total $1,000 for the year.
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