Indigo Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2022. January February Sales $360,200 $401,000 Purchases 120,200 131,500 Salaries 84,700 81,700 Administrative expenses 71,400 73,900 Selling expenses 78,000 86,400 All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred. Administrative expenses include $1,300 of depreciation per month. Other data. 1. Collections from customers: January $333,700; February $378,300. 2. Payments for purchases: January $110,600; February $142,900. 3. Other receipts: January: collection of December 31, 2021, notes receivable $17,400; February: proceeds from sale of securities $5,000. 4. Other disbursements: February $13,000 cash dividend. The company’s cash balance on January 1, 2022, is expected to be $47,700. The company wants to maintain a minimum cash balance of $52,370. Need help with preparing a cash burdget for January and February.
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.
Indigo Corporation prepares monthly
January
|
February
|
|||
---|---|---|---|---|
Sales
|
$360,200 | $401,000 | ||
Purchases
|
120,200 | 131,500 | ||
Salaries
|
84,700 | 81,700 | ||
Administrative expenses
|
71,400 | 73,900 | ||
Selling expenses
|
78,000 | 86,400 |
All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred. Administrative expenses include $1,300 of depreciation per month.
Other data.
1. | Collections from customers: January $333,700; February $378,300. | |
2. | Payments for purchases: January $110,600; February $142,900. | |
3. | Other receipts: January: collection of December 31, 2021, notes receivable $17,400; February: proceeds from sale of securities $5,000. | |
4. | Other disbursements: February $13,000 cash dividend. |
The company’s cash balance on January 1, 2022, is expected to be $47,700. The company wants to maintain a minimum cash balance of $52,370.
Need help with preparing a cash burdget for January and February.
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)