[The following information applies to the questions displayed below] Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x2. Past experience has indicated that 75 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows: 80 percent during month of sale 15 percent during month following sale 5 percent uncollectible The total sales for December 20x1 are expected to be $196,000. The controller feels that sales in January 20x2 could range from $112,000 to $160,000 Required: 1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three differen levels of January sales. Use the following columnar format. Cash receipts in January 20x2 From December sales on account Total Sales in January, 20x2 $ 112,000 $ 138,000 $ 160,000
[The following information applies to the questions displayed below] Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20x2. Past experience has indicated that 75 percent of the store's sales are cash sales. The collection experience for the sales on account is as follows: 80 percent during month of sale 15 percent during month following sale 5 percent uncollectible The total sales for December 20x1 are expected to be $196,000. The controller feels that sales in January 20x2 could range from $112,000 to $160,000 Required: 1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three differen levels of January sales. Use the following columnar format. Cash receipts in January 20x2 From December sales on account Total Sales in January, 20x2 $ 112,000 $ 138,000 $ 160,000
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.
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![Required information
[The following information applies to the questions displayed below]
Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about
to prepare the budget for the first quarter of 20x2. Past experience has indicated that 75 percent
of the store's sales are cash sales. The collection experience for the sales on account is as
follows:
80 percent during month of sale
15 percent during month following sale
5 percent uncollectible
The total sales for December 20x1 are expected to be $196,000. The controller feels that sales in
January 20x2 could range from $112,000 to $160,000.
Required:
1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three different
levels of January sales. Use the following columnar format.
Total Sales in January, 20x2
$
112,000 $
138,000 $
160,000
Cash receipts in January 20x2
From December sales on account
From January cash sales
D
From January sales on account
Total cash receipts
$
0 $
0
$
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F35aa5d4f-52e6-42ac-a61d-f407345b8bcc%2F9d4bf475-4b27-4690-b6c2-1481017832d8%2Fmo357sn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below]
Sound Investments, Incorporated, is a large retailer of stereo equipment. The controller is about
to prepare the budget for the first quarter of 20x2. Past experience has indicated that 75 percent
of the store's sales are cash sales. The collection experience for the sales on account is as
follows:
80 percent during month of sale
15 percent during month following sale
5 percent uncollectible
The total sales for December 20x1 are expected to be $196,000. The controller feels that sales in
January 20x2 could range from $112,000 to $160,000.
Required:
1. Demonstrate how financial planning can be used to project cash receipts in January of 20x2 for three different
levels of January sales. Use the following columnar format.
Total Sales in January, 20x2
$
112,000 $
138,000 $
160,000
Cash receipts in January 20x2
From December sales on account
From January cash sales
D
From January sales on account
Total cash receipts
$
0 $
0
$
0
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