Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $34,000 and $50,000, respectively. It also expects credit sales of $60,000 and $70,000, respectively. The companyvexpects to collect 60% of its credit sales in the month of the sale, 35% in the following month, and 5% is deemed uncollectible. What amount of cash collections would appear in the company's cash budget for the first month
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.
Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cash sales of $34,000 and $50,000, respectively. It also expects credit sales of $60,000 and $70,000, respectively. The companyvexpects to collect 60% of its credit sales in the month of the sale, 35% in the following month, and 5% is deemed uncollectible. What amount of cash collections would appear in the company's
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