February January $ 1,400,000 $ 710,000 Sales Cash receipts from customers Cash payments for merchandise inventory 851,420 561,100 871,800 532,310
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.
Preparing a financial budget—
Wilson Company has $11,000 in cash on hand on January 1 and has collected the following budget data:
Assume Wilson has cash payments for selling and administrative expenses including salaries $55,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $8,500. Prepare a cash budget for January and February. Will Wilson need to borrow clash by the end of February?
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