Citrix Corporation has the following budgeted sales for the first and second quarters of the next year (see the first table below regarding cash sales and credit sales for each month). The company is in the process of preparing a cash budget and must determine the expected cash collections by month. Because the company historically has very few uncollectable accounts, all credit sales are expected to be fully collected by the end of the second month following the sale. Based on the historical information, the following information about the collection on credit sales (see the second table below) is availalbe. The total cash collection in April would be: Cash Sales January $80,000 February $60,000 March $50,000 April $80,000 May $40,000 June $60,000 Collection on credit sales 60% in the month of sale 30% 10% in the month following sale in the second month following sale X 153,500 Correct Answer: 233,500 Credit Sales $350,000 $200,000 $145,000 $150,000 $100,000 $100,000
Citrix Corporation has the following budgeted sales for the first and second quarters of the next year (see the first table below regarding cash sales and credit sales for each month). The company is in the process of preparing a cash budget and must determine the expected cash collections by month. Because the company historically has very few uncollectable accounts, all credit sales are expected to be fully collected by the end of the second month following the sale. Based on the historical information, the following information about the collection on credit sales (see the second table below) is availalbe. The total cash collection in April would be: Cash Sales January $80,000 February $60,000 March $50,000 April $80,000 May $40,000 June $60,000 Collection on credit sales 60% in the month of sale 30% 10% in the month following sale in the second month following sale X 153,500 Correct Answer: 233,500 Credit Sales $350,000 $200,000 $145,000 $150,000 $100,000 $100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Citrix Corporation has the following budgeted sales for the first and second quarters of the next
year (see the first table below regarding cash sales and credit sales for each month). The
company is in the process of preparing a cash budget and must determine the expected cash
collections by month. Because the company historically has very few uncollectable accounts, all
credit sales are expected to be fully collected by the end of the second month following the sale.
Based on the historical information, the following information about the collection on credit
sales (see the second table below) is availalbe. The total cash collection in April would be:
Cash Sales
January
$80,000
February
$60,000
March
$50,000
April
$80,000
May
$40,000
June
$60,000
Collection on credit sales
60%
in the month of sale
30%
10%
in the month following sale
in the second month following sale
X
153,500
Correct Answer: 233,500
Credit Sales
$350,000
$200,000
$145,000
$150,000
$100,000
$100,000
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