Indicate the effects of each transaction or adjusting entry on the financial measurements in the five column headings listed. Use the code letters I for increase, D for decrease, and NE for no effect.
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.
Six events relating to liabilities follow:
a. Paid the liability for interest payable accrued at the end of the last accounting period.
b. Made the current monthly payment on a 12-month installment note payable, including interest and a partial repayment of principal.
c. Issued bonds payable at 98 on March 1 of the current year. The bonds pay interest March 1 and September 1.
d. On September 1 of the current year, recorded interest expense and made semiannual interest payment on bonds referred to in part c.
e. Recorded necessary
f. Recorded estimated six-month warranty expense on December 31 of the current year.
Indicate the effects of each transaction or adjusting entry on the financial measurements in the five column headings listed. Use the code letters I for increase, D for decrease, and NE for no effect.
| Transaction | Current Liabilies | Long-Term Liabilties | Net Income | Net |
Net Cash Flow (from All Sources) |
a.
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