The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information: Sales at $500,000, all for cash Merchandise inventory on October 31 was $200,000. The cash balance November 1 was $18,000. Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash. Budgeted depreciation for November is $25,000. The planned merchandise inventory on November 30 is $230,000. The cost of goods sold is 70% of the selling price. All purchases are paid for in cash. The budgeted cash receipts for November are: $475,000 $450,000 $135,000 $350,000 $500,000 $315.000 $355.000 The budgeted net income for November is: $75,000 $35,000 $135,000 $84,000 $50,000 $65,000 $68,000 The budgeted cash disbursements for November are: $345,000 $440,000 $375,000 $530,000 $380,000 $410,000 $405,000
The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information: Sales at $500,000, all for cash Merchandise inventory on October 31 was $200,000. The cash balance November 1 was $18,000. Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash. Budgeted depreciation for November is $25,000. The planned merchandise inventory on November 30 is $230,000. The cost of goods sold is 70% of the selling price. All purchases are paid for in cash. The budgeted cash receipts for November are: $475,000 $450,000 $135,000 $350,000 $500,000 $315.000 $355.000 The budgeted net income for November is: $75,000 $35,000 $135,000 $84,000 $50,000 $65,000 $68,000 The budgeted cash disbursements for November are: $345,000 $440,000 $375,000 $530,000 $380,000 $410,000 $405,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
The Adams Company, a merchandising firm, has budgeted its activity for November according to the following information:
- Sales at $500,000, all for cash
- Merchandise inventory on October 31 was $200,000.
- The cash balance November 1 was $18,000.
- Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.
- Budgeted
depreciation for November is $25,000. - The planned merchandise inventory on November 30 is $230,000.
- The cost of goods sold is 70% of the selling price.
- All purchases are paid for in cash.
The budgeted cash receipts for November are:
$475,000
$450,000
$135,000
$350,000
$500,000
$315.000
$355.000
The budgeted net income for November is:
$75,000
$35,000
$135,000
$84,000
$50,000
$65,000
$68,000
The budgeted cash disbursements for November are:
$345,000
$440,000
$375,000
$530,000
$380,000
$410,000
$405,000
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