Ameer Trading Company is dealing in different kinds of buying and selling of electronics products to vast range of customers in Sohar region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: - January February March April May June July 325,000 320,000 319,000 345,000 365,000 326,500 314,500 The sales reported every month including cash sales and credit sales. Cash sales constitute 40% of total sales collected in the month of sales and the balance is credit sales received in the month following the month of sales. The detail of goods purchased in cash during seven months reported in purchase book as below: - January February March April May June July 26,500 28,500 29,500 27,500 23,500 24,800 22,000 Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month January to July is given below: - January February March April May June July 125,000 111,600 126,500 145,600 132,500 115,000 116,000 Cash purchases payable in the month of purchases and credit purchases are payable to supplier in two months following the month of credit purchase. It is also found from the accounting records that the company has purchased a plant and equipment for RO 22,000 in March and it is payable in two equal instalments starting from April. Tax department has sent a notice to the company to pay taxes of RO 6,750 each in the month of May and June. The wages and office expenses are paid in the month following the month in which wages and office expenses incurred. The detail of wages and office expenses is given below: - January February March April May June July Wages 2,250 2,200 2,150 2,650 2,350 2,450 2,260 Office Expenses 3,300 3,150 3,250 3,160 3,160 3,280 3,120 The selling expenses of the company recorded for the seven months are as follows: - January February March April May June July 1,250 1,650 1,450 1,680 1,290 1,780 1,500 The company also incurred administrative expenses for the period January to July. The detail of administrative expenses is given as below: - January February March April May June July 1,600 1,650 1,750 1,650 1,890 1,990 2,020 The company is paying the selling and administration expenses in two months following the month in which such expenses incurred. The cash balance as on 1st April is RO 47,800. Requirement: The Company has requested you to prepare Cash budget for the period of April to June.
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.
Ameer Trading Company is dealing in different kinds of buying and selling of electronics products to vast range of customers in Sohar region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: -
|
January |
February |
March |
April |
May |
June |
July |
|
325,000 |
320,000 |
319,000 |
345,000 |
365,000 |
326,500 |
314,500 |
The sales reported every month including cash sales and credit sales. Cash sales constitute 40% of total sales collected in the month of sales and the balance is credit sales received in the month following the month of sales.
The detail of goods purchased in cash during seven months reported in purchase book as below: -
|
January |
February |
March |
April |
May |
June |
July |
|
26,500 |
28,500 |
29,500 |
27,500 |
23,500 |
24,800 |
22,000 |
Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month January to July is given below: -
|
January |
February |
March |
April |
May |
June |
July |
|
125,000 |
111,600 |
126,500 |
145,600 |
132,500 |
115,000 |
116,000 |
Cash purchases payable in the month of purchases and credit purchases are payable to supplier in two months following the month of credit purchase.
It is also found from the accounting records that the company has purchased a plant and equipment for RO 22,000 in March and it is payable in two equal instalments starting from April. Tax department has sent a notice to the company to pay taxes of RO 6,750 each in the month of May and June.
The wages and office expenses are paid in the month following the month in which wages and office expenses incurred. The detail of wages and office expenses is given below: -
|
|
January |
February |
March |
April |
May |
June |
July |
|
Wages |
2,250 |
2,200 |
2,150 |
2,650 |
2,350 |
2,450 |
2,260 |
|
Office Expenses |
3,300 |
3,150 |
3,250 |
3,160 |
3,160 |
3,280 |
3,120 |
The selling expenses of the company recorded for the seven months are as follows: -
|
January |
February |
March |
April |
May |
June |
July |
|
1,250 |
1,650 |
1,450 |
1,680 |
1,290 |
1,780 |
1,500 |
The company also incurred administrative expenses for the period January to July. The detail of administrative expenses is given as below: -
|
January |
February |
March |
April |
May |
June |
July |
|
1,600 |
1,650 |
1,750 |
1,650 |
1,890 |
1,990 |
2,020 |
The company is paying the selling and administration expenses in two months following the month in which such expenses incurred.
The cash balance as on 1st April is RO 47,800.
Requirement: The Company has requested you to prepare
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