CASH BUDGET Richard LT Corporation is preparing its cash budget for the year 2015. Richard's beginning cash balance is P20,000. Sales are estimated to be at P500,000, 70% of which are on credit. A total of 80% of credit sales are expected to be collected in 2015. Cash expenditures for the year are forecasted to increase to P350,000, a 25% increase from previous year's balance. Accounts receivable from December 31, 2014 totaling P10,000 will be collected in the current year. The company is required to make a P50,000 loan payment and an annual interest payment on December 31, 2015. The loan balance as of December 31, 2014 is P100,000 and the annual interest rate is 12%. Prepare a cash budget for the year ended December 31, 2015

CASH BUDGET Richard LT Corporation is preparing its cash budget for the year 2015. Richard's beginning cash balance is P20,000. Sales are estimated to be at P500,000, 70% of which are on credit. A total of 80% of credit sales are expected to be collected in 2015. Cash expenditures for the year are forecasted to increase to P350,000, a 25% increase from previous year's balance. Accounts receivable from December 31, 2014 totaling P10,000 will be collected in the current year. The company is required to make a P50,000 loan payment and an annual interest payment on December 31, 2015. The loan balance as of December 31, 2014 is P100,000 and the annual interest rate is 12%. Prepare a cash budget for the year ended December 31, 2015

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

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.

Question

CASH BUDGET
Richard LT Corporation is preparing its cash budget for the year 2015. Richard's beginning cash balance
is P20,000. Sales are estimated to be at P500,000, 70% of which are on credit. A total of 80% of credit
sales are expected to be collected in 2015. Cash expenditures for the year are forecasted to increase to
P350,000, a 25% increase from previous year's balance. Accounts receivable from December 31, 2014
totalingP10,000 will be collected in the current year. The company is required to make a P50,000 loan
payment and an annual interest payment on December 31, 2015. The loan balance as of December 31,
2014 is P100,000 and the annual interest rate is 12%.
Prepare a cash budget for the
year ended December 31.
2015 *

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