The Ellis Company has budgeted its activity for September according to the following information: Sales are budgeted at $392,000 and all sales are for cash. All purchases of merchandise inventory are for cash. Merchandise inventory was $150,000 on August 31 and the planned merchandise inventory on September 30 is $140,000. All merchandise is sold at 40% above cost. The selling and administrative expenses are budgeted at $92,000 for the month. All of these expenses are paid for in cash except for depreciation of $12,000. The budgeted net income for September is?
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 Ellis Company has budgeted its activity for September according to the following information:
- Sales are budgeted at $392,000 and all sales are for cash.
- All purchases of merchandise inventory are for cash.
- Merchandise inventory was $150,000 on August 31 and the planned merchandise inventory on September 30 is $140,000.
- All merchandise is sold at 40% above cost.
- The selling and administrative expenses are budgeted at $92,000 for the month.
- All of these expenses are paid for in cash except for
depreciation of $12,000.
The budgeted net income for September is?
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