Jul Aug Sep Cash collections $68,000 $34,000 $42,000 Cash payments: Purchases of direct materials 31,000 32,000 25,000 Operating expenses 11,000 19,000 20,000 Capital expenditures 0 34,000 7000The cash balance on June 30 is projected to be $12,000. Based on the above data, calculate the shortfall the company is projected to have at the end of August.
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.
Hutchinson, Inc. provides the following data taken from its third quarter budget:
| Jul | Aug | Sep | |
| Cash collections | $68,000 | $34,000 | $42,000 |
| Cash payments: | |||
| Purchases of direct materials | 31,000 | 32,000 | 25,000 |
| Operating expenses | 11,000 | 19,000 | 20,000 |
| Capital expenditures | 0 | 34,000 | 7000 |
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