Fernando Company developed the following data for the month of August: 1. August 1 cash balance P123,000. 2. Cash sales in August P800,000. 3. Credit sales for August are P300,000; for July P400,000; and for June P400,000. 70% of credit sales are collected in the month of sale, 15% in the following month, and 10% in the second month following the sale. 4. Purchases for July were P500,000 and for August are P400,000. One-fourth of purchases are paid in the month of purchase and the remaining three-quarters in the following month. 5. August salaries are P314,000, utilities are P32,200, and depreciation on the building and equipment is P100,000. Required: 4. Anticipated cash balance on August 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.
Fernando Company developed the following data for the month of August:
1. August 1 cash balance P123,000.
2. Cash sales in August P800,000.
3. Credit sales for August are P300,000; for July P400,000; and for June P400,000. 70% of credit sales are collected in the month of sale, 15% in the
following month, and 10% in the second month following the sale.
4. Purchases for July were P500,000 and for August are P400,000. One-fourth of purchases are paid in the month of purchase and the remaining three-quarters in the following month.
5. August salaries are P314,000, utilities are P32,200, and
Required:
4. Anticipated cash balance on August 31.
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