son Company prepared a cash budget by quarters for the upcoming year. Missing data amounts are indicated with question marks or lower case letters; these lower case letters will be referred to in the questions that follow
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.
Olson Company
Olson Company prepared a
Olson requires a minimum balance of $10,000 to start a quarter. All data are in thousands.
| Olson Corporation Cash Budget | ||||
|---|---|---|---|---|
| QTR 1 | QTR 2 | QTR 3 | QTR 4 | |
| Cash balance, beginning | $16 | $e | $13 | $10 |
| Add collections from customers | a | 70 | 67 | 80 |
| Total cash available | ? | ? | 80 | 90 |
| Less disbursements: | ||||
| Purchase of inventory | 31 | c | 40 | 35 |
| Operating expenses | 25 | 22 | ? | 15 |
| Equipment purchases | 10 | 14 | 19 | 0 |
| Dividends | 0 | 6 | 0 | 5 |
| Total disbursements | 66 | ? | f | 55 |
| Excess (deficiency) of cash available over disbursements | 7 | 17 | (2) | 35 |
| Financing: | ||||
| Borrowings: | b | -- | 12 | -- |
| Repayments (including interest) | -- | d | -- | (12) |
| Total financing | ? | ? | 12 | (12) |
| Cash balance, ending | $10 | $? | $10 | $23 |
A) Refer to Olson Company. The collections from customers during the first quarter (item a) are:
C) Refer to Olson Company. The cash disbursed for purchases during the second quarter (item c) is:
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