Compton Company expects the following total sales: Month Sales March $30,000 April $20,000 May $30,000 June $25,000 The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale. What is the budgeted accounts receivable balance on May 31?
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.
Compton Company expects the following total sales:
| Month | Sales | |
| March | $30,000 | |
| April | $20,000 | |
| May | $30,000 | |
| June | $25,000 | |
The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale.
What is the budgeted accounts receivable balance on May 31?
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