HASF Inc a distributor of cosmetics throughout Karachi, is in the process of assembling a cash budget for the first quarter 2015 the following information has been extracted from the company s’ accounting records 1. All sales divided in equal part between cash and credit sales. 45 % of credit sales are collected in the month of sales 45% are collected in the following month and remaining is uncollectible. Management believes that only 20% of the a/c receivable outstanding on December 2014 will be recovered that the recovery will be in January 2015 2. 65% of Purchase are paid for in the month of purchase the remaining 35% are paid for in the month after acquisition 3. The December 31 2014 balance sheet disclosed the following selected figures cash 20,000 a/c receivable 55,000 and a/c payable 22,000 4. Company Maintains a 20,000 minimum cash balance at all time. Financing is available in 1,000 multiples at an 8% interest rate interest is paid ate the time of repaying principle. Additinal data: Jan Feb March Sales 150,000 180,000 185,000 Purchases 90,000 100,000 140,000 Cash operating cost 31,000 24,000 45,000 Proceeds from the sales of equipment 5,000 Required: 1. Total amount of cash will be received at end March 31 ( Jan + Feb + March ) 2. Total amount of total cash disburstment at end of March 31 ( jan + feb + march ) 3. Total amount of loan ( jan + feb + March ) 4. Cash balacne at end of March 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.
HASF Inc a distributor of cosmetics throughout Karachi, is in the process of assembling a
1. All sales divided in equal part between cash and credit sales. 45 % of credit sales are collected in the month of sales 45% are collected in the following month and remaining is uncollectible. Management believes that only 20% of the a/c receivable outstanding on December 2014 will be recovered that the recovery will be in January 2015
2. 65% of Purchase are paid for in the month of purchase the remaining 35% are paid for in the month after acquisition
3. The December 31 2014
4. Company Maintains a 20,000 minimum cash balance at all time. Financing is available in 1,000 multiples at an 8% interest rate interest is paid ate the time of repaying principle.
Additinal data:
| Jan | Feb | March | |
| Sales | 150,000 | 180,000 | 185,000 |
| Purchases | 90,000 | 100,000 | 140,000 |
| Cash operating cost | 31,000 | 24,000 | 45,000 |
| Proceeds from the sales of equipment | 5,000 |
Required:
1. Total amount of cash will be received at end March 31 ( Jan + Feb + March )
2. Total amount of total cash disburstment at end of March 31 ( jan + feb + march )
3. Total amount of loan ( jan + feb + March )
4. Cash balacne at end of March 31
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