Prepare the appropriate journal entries for the 2024 transactions. Prepare the liability section of the balance sheet at December 31, 2024, based on the data supplied. Prepare the appropriate journal entries for the events occurring in March of 2025.
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.
Grossman Products began operations in 2024. The following selected transactions occurred from September 2024 through March 2025. Grossman's fiscal year ends on December 31.
2024:
- (a.) On September 5, Grossman opened a checking account and negotiated a short-term line of credit of up to $9,400,000 at 10% interest. The company is not required to pay any commitment fees.
- (b.) On October 1, Grossman borrowed $7,400,000 cash and issued a 5-month promissory note with 12% interest payable at maturity.
- (c.) Grossman received $2,400 of refundable deposits in December for reusable containers.
- (d.) For the September through December period, sales on account totaled $4,400,000. The state sales tax rate is 4% and 70% of sales are subject to sales tax.
- (e.) Grossman recorded accrued interest.
2025:
- (f.) Grossman paid the promissory note on the March 1 due date.
- (g.) Half of the storage containers are returned in March, with the other half expected to be returned over the next 6 months.
- Prepare the appropriate
journal entries for the 2024 transactions. - Prepare the liability section of the balance sheet at December 31, 2024, based on the data supplied.
- Prepare the appropriate journal entries for the events occurring in March of 2025.
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