Cash receipts budget Kiel Center’s sales are all made on account. The firm’scollection experience has been that 35% of a month’s sales are collected in the month the sale is made, 55% are collected in the month following the sale, and 8% are collected in the second month following the sale. The sales forecast for the months of June through September is: June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,000Required:Calculate the cash collections that would be included in the cash budgets for Augustand September.
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.
Cash receipts budget Kiel Center’s sales are all made on account. The firm’s
collection experience has been that 35% of a month’s sales are collected in the month the sale is made, 55% are collected in the month following the sale, and 8% are collected in the second month following the sale. The sales
June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000
July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000
August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000
September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,000
Required:
Calculate the cash collections that would be included in the
and September.
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