Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2: Dec. Year 1 Jan. Year 2 Feb. Year 2 Mar. Year 2 (Actual) (Budgeted) (Budgeted) (Budgeted) Credit sales $ 55,000 $ 135,000 $ 150,000 $ 105,000 Cash sales $ 14,000 $ 20,000 $ 25,000 $ 7,000 Based on the company's collection history, 42% of credit sales are collected in month of sale, and the remainder is collected in the following month. Cash collections in January from December credit sales would be: Multiple Choice $31,900. $32,000. $30,800. $30,620.
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.
Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2:
| Dec. Year 1 | Jan. Year 2 | Feb. Year 2 | Mar. Year 2 | ||||||||||||
| (Actual) | (Budgeted) | (Budgeted) | (Budgeted) | ||||||||||||
| Credit sales | $ | 55,000 | $ | 135,000 | $ | 150,000 | $ | 105,000 | |||||||
| Cash sales | $ | 14,000 | $ | 20,000 | $ | 25,000 | $ | 7,000 | |||||||
Based on the company's collection history, 42% of credit sales are collected in month of sale, and the remainder is collected in the following month.
Cash collections in January from December credit sales would be:
-
$31,900.
-
$32,000.
-
$30,800.
-
$30,620.
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