PRS company is preparing cash budget for the forthcoming year with the following details: 151 2nd 3rd quarter 4th quarter Quarter Quarter Total cash receipts $180.000 $330,000 $210.000 S230.000 Total cash disbursements $260,000 $230,000 $220,000 $240,000 Cash balance at beginning of the year is $20,000. It is a goal for the company to maintain the minimum cash balance of $10,000 and borrow the funds from local bank as and when required at quarterly interest rate of 3%. The funds can be borrowed at beginning of the quarter and repaid at end of the year. Repayment can be full or part of loan. Interest will be due on principal amount that is repaid.
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.
PRS company is preparing
151
2nd
3rd quarter 4th quarter
Quarter Quarter
Total cash receipts $180.000 $330,000 $210.000 S230.000
Total cash disbursements $260,000 $230,000 $220,000 $240,000
Cash balance at beginning of the year is $20,000. It is a goal for the company to maintain
the minimum cash balance of $10,000 and borrow the funds from local bank as and when
required at quarterly interest rate of 3%. The funds can be borrowed at beginning of the
quarter and repaid at end of the year. Repayment can be full or part of loan. Interest will
be due on principal amount that is repaid.
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