Cloudy Company had the following historical collection pattern for its credit sales: 70% collected in the month of sale 12% collected in the first month after month of sale 10% collected in the second month after month of sale 5% collected in the third month after month of sale 3% uncollectible The sales on open account (credit sales) have been budgeted for the last six months of the year as shown below: July $ 92,000
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.
![Cloudy Company had the following historical collection pattern for its credit sales:
70% collected in the month of sale
12% collected in the first month after month of sale
10% collected in the second month after month of sale
5% collected in the third month after month of sale
3% uncollectible
The sales on open account (credit sales) have been budgeted for the last six months of the year as
shown below:
July
August
September
October
November
December
The estimated cash collection by Cloudy Company during September from credit sales in July,
August, and September is:
Multiple Choice
$83,840.
$100,160.
$90,880.
$ 92,000
$ 104,000
$ 116,000
$ 128,000
$ 140,000
$ 122,000
$64,400.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f4db26a-b75a-4a8b-a697-68497c3a0e98%2Fbb38426e-6e43-486d-a4a7-216e96fe2983%2F42nmu2j_processed.png&w=3840&q=75)
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