Guitar Supplies Company has the following sales budget for the first three months of the current year: Month January February March Sales Revenue ● $300,000 ● 75,000 Historically, the following trend has been established regarding cash collection of sales: 220,000 65 percent in month of sale ● 25 percent in month following sale 8 percent in second month following sale 2 percent uncollectible The company allows a 2 percent cash discount for payments made by customers during the month of the sale. November and December sales were $50,000 and $100,000.
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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