Spana Company has the following data: Table 4: Total Monthly Purchasing Budget Month Budgeted Purchases January 220,000 February 185,000 March 240,000 April 155,000 May 180,000 Purchases are paid as follows: ∙ 10% in the month of purchase ∙ 60% one month after purchase ∙ 30% two months after purchase Required: (i) Develop a schedule of cash disbursements for purchases for March, April and May.
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.
Spana Company has the following data:
Table 4: Total Monthly Purchasing Budget
|
Month |
Budgeted Purchases |
|
January |
220,000 |
|
February |
185,000 |
|
March |
240,000 |
|
April |
155,000 |
|
May |
180,000 |
Purchases are paid as follows:
∙ 10% in the month of purchase
∙ 60% one month after purchase
∙ 30% two months after purchase
Required:
(i) Develop a schedule of cash disbursements for purchases for March, April and May.
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