From the following information available from a company, prepare Cash Budget (monthly) for April, May and June, 2018: Months Sales Purchases Wages Expenses January 90000 50000 30000 5000 February 80000 50000 24000 4000 March 80000 45000 22000 6000 April 85000 48000 25000 7000 May 75000 42000 20000 6000 June 78000 44000 23000 5000 25% of purchases are cash and balance credit purchases to be paid in one month. 40% of sales is cash sales and balance credit purchases to be paid in two months. Wages to be paid in the month of the occurrence Expenses paid in one month Cash balance as on April RO 27500
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.
- From the following information available from a company, prepare
Cash Budget (monthly) for April, May and June, 2018:
|
Months |
Sales |
Purchases |
Wages |
Expenses |
|
January |
90000 |
50000 |
30000 |
5000 |
|
February |
80000 |
50000 |
24000 |
4000 |
|
March |
80000 |
45000 |
22000 |
6000 |
|
April |
85000 |
48000 |
25000 |
7000 |
|
May |
75000 |
42000 |
20000 |
6000 |
|
June |
78000 |
44000 |
23000 |
5000 |
- 25% of purchases are cash and balance credit purchases to be paid in one month.
- 40% of sales is cash sales and balance credit purchases to be paid in two months.
- Wages to be paid in the month of the occurrence
- Expenses paid in one month
- Cash balance as on April RO 27500
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