Leaning Tower of Pizza, Inc. is preparing its master budget for its first quarter of business. It expects to sell 8,000 pizzas at $8 per pizza per month. It expects to collect 80% of the sales revenue in the month of the sale and the remainder in the following month. Calculate its accounts receivable balance at the end of its first quarter.
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.
Leaning Tower of Pizza, Inc. is preparing its
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