Anderson Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,400,000. Suppose management projects that its current year's quarterly sales will increase by 6% in quarter 1, by another 3% in quarter 2, by another 7% in quarter 3, and by another 5% in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 20% of revenues during each of the first two quarters, 25% of revenues during the third quarter, and 35% during the fourth quarter. Requirement Prepare a budgeted income statement for each of the four quarters and for the entire year. Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.) Anderson Motors Budgeted Income Statement For the Upcoming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Sales Less: Cost of goods sold Gross profit
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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