The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: Sales at $640,000, all for cash. Merchandise inventory on November 30 was $295,000. The cash balance at December 1 was $37,000. Selling and administrative expenses are budgeted at $117,000 for December and are paid in cash. Budgeted depreciation for December is $63,000. The planned merchandise inventory on December 31 is $325,000. The cost of goods sold is 70% of the sales price. All purchases are paid for in cash. There is no interest expense or income tax expense. The budgeted cash receipts for December are: Multiple Choice $505,000 $703,000 $135,000 $640,000
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.
The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:
- Sales at $640,000, all for cash.
- Merchandise inventory on November 30 was $295,000.
- The cash balance at December 1 was $37,000.
- Selling and administrative expenses are budgeted at $117,000 for December and are paid in cash.
- Budgeted
depreciation for December is $63,000. - The planned merchandise inventory on December 31 is $325,000.
- The cost of goods sold is 70% of the sales price.
- All purchases are paid for in cash.
- There is no interest expense or income tax expense.
The
-
$505,000
-
$703,000
-
$135,000
-
$640,000
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