BCAS Ltd is developing a cash budget for April, May and June 2022, and the following information was gathered: Cash Receipts 1 Sales revenue for February and March 2022 are $200,000 and $180,000 respectively. The forecasted sales revenue for April, May and June 2022 are $170,000, $220,000 and $280,000 respectively. Historically, 30% of the firm’s sales are in cash, 60% are collected in the next month, and the remaining 10% are collected in the second month following the sale. 2 Monthly rental income received is $60,000. 3 Interest income of $10,000 will be received in May 2022. Cash Disbursements 4 The expected purchases are $150,000, $110,000 and $190,000 for the months of April, May and June 2022 respectively. The company pays all its purchases in the month of purchase. 5 Monthly salaries paid is $70,000. 6 Commission is paid to its salesman at 2% of current month’s sales. 7 Renovation of all retail outlets amounting to $400,000 is scheduled for payment in June 2022. Use the following templates to prepare the cash budget for April, May and June 2022: Receipts Feb $ Mar $ Apr $ May $ Jun $ Sales 200,000 180,000 170,000 220,000 280,000 Cash sales (30%) X X Lag 1 month (60%) X X Lag 2 months (10%) X X Rental income ($C0,000) X X Interest income X X Total Cash Receipts X X
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.
BCAS Ltd is developing a
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Cash Receipts |
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1 |
Sales revenue for February and March 2022 are $200,000 and $180,000 respectively. The
Historically, 30% of the firm’s sales are in cash, 60% are collected in the next month, and the remaining 10% are collected in the second month following the sale. |
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2 |
Monthly rental income received is $60,000. |
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3 |
Interest income of $10,000 will be received in May 2022. |
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Cash Disbursements |
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4 |
The expected purchases are $150,000, $110,000 and $190,000 for the months of April, May and June 2022 respectively. The company pays all its purchases in the month of purchase. |
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5 |
Monthly salaries paid is $70,000. |
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6 |
Commission is paid to its salesman at 2% of current month’s sales. |
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7 |
Renovation of all retail outlets amounting to $400,000 is scheduled for payment in June 2022. |
Use the following templates to prepare the cash budget for April, May and June 2022:
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Receipts |
Feb $ |
Mar $ |
Apr $ |
May $ |
Jun $ |
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Sales |
200,000 |
180,000 |
170,000 |
220,000 |
280,000 |
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Cash sales (30%) |
X |
X |
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Lag 1 month (60%) |
X |
X |
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Lag 2 months (10%) |
X |
X |
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Rental income ($C0,000) |
X |
X |
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Interest income |
X |
X |
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Total Cash Receipts |
X |
X |
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