Martinez, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: June July August (a) June July August $130,000 $ 94,000 $135,000 98,000 254,000 192,000 $233,000 $384,000 $ 286,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $50,000 each month, (b) dividends of $109,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month. June $302,000 July 220,000 Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts) August 109,000 Credit sales Schedule of Expected Collections from Customers $ July 130000 254000 78000 $ August 94000 192000 56400
Martinez, Inc. has budgeted sales revenues as follows: Credit sales Cash sales Total sales Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in the month following purchase. Budgeted inventory purchases are as follows: June July August (a) June July August $130,000 $ 94,000 $135,000 98,000 254,000 192,000 $233,000 $384,000 $ 286,000 Other cash disbursements budgeted: (a) selling and administrative expenses of $50,000 each month, (b) dividends of $109,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash. The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month. June $302,000 July 220,000 Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts) August 109,000 Credit sales Schedule of Expected Collections from Customers $ July 130000 254000 78000 $ August 94000 192000 56400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
fix my numbers please
Transcribed Image Text:Martinez, Inc. has budgeted sales revenues as follows:
Credit sales
Cash sales
Total sales
June
July
August
Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on account with 50% is paid in the month of purchase and 50% paid in
the month following purchase. Budgeted inventory purchases are as follows:
July
August
$130,000 $ 94,000
254,000
192,000
$233,000 $384,000 $ 286,000
June
June
$135,000
July
August
98,000
$302,000
Other cash disbursements budgeted: (a) selling and administrative expenses of $50,000 each month, (b) dividends of $109,000 will be paid in July, and (c) purchase of equipment in August for $37,000 cash.
The company's policy is to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when
there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money in this case is for one month.
Credit sales
220,000
Prepare separate schedules for expected collections from customers and expected payments for purchases of inventory. (Do not leave any answer field blank. Enter O for amounts.)
109,000
Schedule of Expected Collections from Customers
$
Total collections $
July
130000
254000
78000
386000
$
$
August
94000
192000
56400
52000
Transcribed Image Text:Inventory purchases
June
July
Schedule of Expected Payments for Purchases of Inventory.
July
August
$
Total payments $
220000
110000
151000
261000
$
$
August
109000
54500
110000
164500
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