Bandeiras Company has budgeted its activity for December according to the following information: Sales at R550 000. All sales are cash sales. Inventory balance on 30 November was R300 000. Budgeted depreciation for December is R35 000. The cash balance on 1 December was R25 000. Selling and administrative expenses are budgeted at R60 000 for December and are paid in cash in the same month. The planned inventory balance on 31 December is R270 000. The invoice cost for purchases represents 75% of the sales price. All purchases are paid for in cash. The total budgeted cash receipts for December are: A. R137 500 B. R412 500 C. R585 000 D. R550 000
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.
Bandeiras Company has budgeted its activity for December according to the following information:
- Sales at R550 000. All sales are cash sales.
- Inventory balance on 30 November was R300 000.
- Budgeted
depreciation for December is R35 000. - The cash balance on 1 December was R25 000.
- Selling and administrative expenses are budgeted at R60 000 for December and are paid in cash in the same month.
- The planned inventory balance on 31 December is R270 000.
- The invoice cost for purchases represents 75% of the sales price. All purchases are paid for in cash.
The total budgeted cash receipts for December are:
| A. |
R137 500 |
|
| B. |
R412 500 |
|
| C. |
R585 000 |
|
| D. |
R550 000 |
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