BALL COMPANY Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $ 23,000 Accounts Receivable 32,000 Merchandise Inventory 15,500 Prepaid Insurance 2,400 Equipment and Fixtures 60,000 Accumulated Depreciation $ 10,000 Accounts Payable 24,000 Salaries and Commissions Payable 6,600 Common Stock 18,000 Retained Earnings 74,300 Totals $ 132,900 $ 132,900 Budgeted total sales, all on account $ 121,800 Budgeted purchases of merchandise inventory, all on account 60,400 Budgeted cost of goods sold 60,900 Budgeted selling and administrative expenses: Commissions expense 6,090 Salaries expense 7,000 Rent expense 4,100 Depreciation expense 600 Insurance expense 400 Budgeted cash receipts from customers 125,840 Budgeted cash payments for merchandise inventory 67,775 Budgeted cash payments for salaries and commissions 14,822 Budgeted income tax expense 5,400
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.
Preparing a financial budget—
Ball Company has the following post-closing
The company’s accounting department has gathered the following budgeting information for the first quarter of 2019:
Additional information:
Rent and income tax expenses are paid as incurred. Insurance expense is an expense is an expiration of the prepaid amount.
Requirements
- Prepare a budgeted income statement for the quarter ended March 31, 2019.
- Prepare a budgeted balance sheet as of March 31, 2019.
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