A company is working on their budgets for the year 2021 few of their expectations for 2021. Accounts Receivable on January 1 Sales in January Sales in February Sales in March Sales in April $43,330 $60,923 $50,825 $77,902 $61,401 Historically, this company's collection pattern for sales has been 19% as cash and 81% on account. The sales on account get collected 53% one month foll the sale and the remainder two months following the sale. The Accounts Receivable on January 1 is the result of credit sales in Decemb 2020 and thus is expected to be collected according to the sales on account (53%/47%). How much should this company expect in Cash Collections for the month of Fohruan? (round to the nearest whole dollar/innut.code 1
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.
The company makes sales on cash and sales on account. The entity makes sales on account to attract customers and to compete in the market. The entity makes its credit policy related to the collection of sales on account. For example company can make 70% of the sale on cash and the remainder on credit.
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