CRANE COMPANY Cash Budget February January $1 $4 %24
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.
Crane Company expects to have a cash balance of $60,350 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017.
| 1. | Collections from customers: January $85,350, February $160,350. | |
| 2. | Payments to suppliers: January $54,350, February $89,350. | |
| 3. | Wages: January $30,490, February $40,490. Wages are paid in the month they are incurred. | |
| 4. | Administrative expenses: January $21,490, February $24,490. These costs include |
|
| 5. | Selling expenses: January $15,490, February $20,490. These costs are exclusive of depreciation. They are paid as incurred. | |
| 6. |
Sales of short-term investments in January are expected to realize $12,490 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $34,350. |
Prepare a
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
