Budgeted sales at Ikkeep Corporation over the next four months are given below: September $150,000 October $160,000 November $180,000 December $140,000 The company estimates that 25% of the sales are for cash, and 75% on credit. Collections for sales on account follow a stable pattern as follows: 50% will be collected in the month of the sale, 30% in the month following the sale, 15% in the second month following the sale, and the rest uncollectible. What would be the expected cash receipts for December?
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.
Budgeted sales at Ikkeep Corporation over the next four months are given below:
|
September
|
$150,000
|
|
October
|
$160,000
|
|
November
|
$180,000
|
|
December
|
$140,000
|
The company estimates that 25% of the sales are for cash, and 75% on credit. Collections for sales on account follow a stable pattern as follows:
50% will be collected in the month of the sale, 30% in the month following the sale, 15% in the second month following the sale, and the rest uncollectible. What would be the expected cash receipts for December?
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