Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September Total Budgeted sales P600,000 P900,000 P2,000,000 P2,000.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, bymonth and in total, for the thirdquarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as ofthat date.
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.
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