Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022. (i) Extracts from the sales and purchases budgets are as follows: Month 2021 - 2022 Cash Sales Sales On
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.
Pelican Merchandising & More is a family-owned store. The business is now approaching the
end of the year and is in the process of identifying its cash needs for the first quarter of the new
year. You are the
budget
(i) Extracts from the sales and purchases budgets are as follows:
Month
2021 - 2022
Cash
Sales
Sales
On
Account
Cash
Purchases
Purchases
On
Account
November 2021 $138,100 $480,000 $345,000
December 2021 $156,500 $600,000 $25,800 $380,000
January 2022 $170,975 $650,000 $44,625 $400,000
February 2022 $135,740 $700,000 $30,400 $480,000
March 2022 $226,420 $800,000 $55,100 $540,00
A schedule of expected cash disbursements for accounts payable (purchases on account)
for each of the months January to March.
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