he following is the sales budget for the given months of Hecto, Ltd.: Cash Sales Credit Sales May $59,000 $283,000 June $43,000 $236,000 July $33,000 $205,000 August $47,000 $268,000 September $46,000 $197,000 Additional information to be used determining the expected cash collections each month that will be used in preparing the cash budget: Collections on Credit sales: 50% in month of sale 20% in month following sale 30% in second month following sale The Accounts Receivable balance on May 1 was $53,000. Of this amount, $41,000 represented uncollected April sales and $12,000 represented uncollected March sales. Part 1: What is the expect cash to be collected in May? Part 2: The budgeted Accounts Receivable on September 1 would be: (195500, 202900, 178900, 224900, OR 173300)
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.
The following is the sales budget for the given months of Hecto, Ltd.:
| Cash Sales | Credit Sales | |
| May | $59,000 | $283,000 |
| June | $43,000 | $236,000 |
| July | $33,000 | $205,000 |
| August | $47,000 | $268,000 |
| September | $46,000 | $197,000 |
Additional information to be used determining the expected cash collections each month that will be used in preparing the
Collections on Credit sales:
- 50% in month of sale
- 20% in month following sale
- 30% in second month following sale
The
What is the expect cash to be collected in May?
Part 2:
The budgeted Accounts Receivable on September 1 would be: (195500, 202900, 178900, 224900, OR 173300)
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