Farm Supply is located in a small town on the coast of Califomia. Data regarding the store's operations follow: Sales are budgeted at 306,554 for November, $ 322.412 for December, and $ 235,978 for January Collections are expected to be 70% in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales The company desires to have an ending merchandise inventory at the end of each month equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $22.400. Monthly depreciation is $27,500. Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $424,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 33,000 83,500 181,800 918.000 $1,216,300 $ 252,000 753,000 211,300 $1,216,300 Total liabilities and stockholders' equity Calculate the difference between cash receipts and cash disbursements for December. Hint: Range of answer is 45,0000 to 60,000
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.
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![Farm Supply is located in a small town on the coast of Califomia. Data regarding the store's operations follow:
• Sales are budgeted at 306.554 for November, $ 322.412 for December, and $ 235,978 for January.
• Collections are expected to be 70% in the month of sale and 30% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company desires to have an ending merchandise inventory at the end of each month equal to 80% of the next month's cost of goods sold. Payment for
merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $22,400.
Monthly depreciation is $27,500.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash
Accounts receivable
Merchandise inventory
Property, plant and equipment, net of $624,000 accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
$ 33,000
83,500
181,800
918.000
$1,216,300
$ 252,000
753,000
211,300
$1,216,300
Total liabilities and stockholders' equity
Calculate the difference between cash receipts and cash disbursements for December.
Hint: Range of answer is 45,0000 to 60,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d8aa6f5-4e5e-4ad7-8330-95db6ad61cd4%2F2f37f5a1-46a7-45a1-b3c8-6a6a3550c4fd%2Fdo200v_processed.jpeg&w=3840&q=75)
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