Sunshine Company is in the process of developing its first quarter budget by month and is having difficulty in determining its expected cash collections. The following actual and expected sales on account are listed: (Sunshine Co. has no cash sales)(Show calculations) November $63,000 December $58,000 January $62,000 February $73,000 March $68,000 The credit manager helped to develop the following profile of collection behavior patterns: Of a given month’s sales: 60% are collected in the month of sale subject to 1% cash discount. 30% of given month’s sales are collected in the month following the sale. The remaining 10% are collected in the second month following the month of the sale. Bad debts are negligible and should be ignored. CALCULATIONS: JANUARY FEBRUARY MARCH TOTALS: __________ __________ __________
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.
- Sunshine Company is in the process of developing its first quarter budget by month and is having difficulty in determining its expected cash collections. The following actual and expected sales on account are listed: (Sunshine Co. has no cash sales)(Show calculations)
November $63,000 December $58,000
January $62,000 February $73,000
March $68,000
The credit manager helped to develop the following profile of collection behavior patterns:
- Of a given month’s sales: 60% are collected in the month of sale subject to 1% cash discount.
- 30% of given month’s sales are collected in the month following the sale.
- The remaining 10% are collected in the second month following the month of the sale.
Bad debts are negligible and should be ignored.
CALCULATIONS: JANUARY FEBRUARY MARCH
TOTALS: __________ __________ __________
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
