ABC Company will start to operations in January, 2003. • Beginning cash balance is 2,500 TL. • Plans to sell 500 boxes at10 TL each month. • 90% of the sales will be in cash, 10% of sales will be collected in the following month. • Jan. short term investment will be sold at 5,000 TL in cash. • Production costs will be 10,000 TL and selling and administrative expenses will be 5,000 TL in january and all will be paid in cash • Production costs will be 20,000 TL and selling and administrative expenses will be 2,500 TL in February and all will be paid in cash • Min. cash balance is 2,500 TL Prepare a cash budget for January and February 2003.
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.
ABC Company will start to operations in January, 2003.
• Beginning cash balance is 2,500 TL.
• Plans to sell 500 boxes at10 TL each month.
• 90% of the sales will be in cash, 10% of sales will be collected in the following month.
• Jan. short term investment will be sold at 5,000 TL in cash.
• Production costs will be 10,000 TL and selling and administrative expenses will be 5,000 TL in january and all will be paid in cash
• Production costs will be 20,000 TL and selling and administrative expenses will be 2,500 TL in February and all will be paid in cash
• Min. cash balance is 2,500 TL
Prepare a
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