Rusizi's budgeted income statement reflects the following amounts: Sales Purchases Expenses January $ 120,000 $ 78,100 $ 24,100 February 110,000 66,100 24,300 March 125,000 81,350 27,100 April 130,000 84,600 28,700 Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Rusizi pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1: Cash $ 88,000 Accounts receivable*Footnote asterisk 58,000 Accounts payable 72,000 *Footnote asteriskOf this balance, $35,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred. What are Rusizi’s budgeted cash payments in February?
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.
Rusizi's
| Sales | Purchases | Expenses | |
|---|---|---|---|
| January | $ 120,000 | $ 78,100 | $ 24,100 |
| February | 110,000 | 66,100 | 24,300 |
| March | 125,000 | 81,350 | 27,100 |
| April | 130,000 | 84,600 | 28,700 |
Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year.
Rusizi pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1:
| Cash | $ 88,000 |
|---|---|
| Accounts receivable*Footnote asterisk | 58,000 |
| Accounts payable | 72,000 |
*Footnote asteriskOf this balance, $35,000 will be collected in January and the remaining amount will be collected in February.
The monthly expense figures include $5,000 of
What are Rusizi’s budgeted cash payments in February?
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