The Model Company is to begin operations in April. It has budgeted April sales of $64,000, May sales of $68,000, June sales of $74,000, July sales of $76,000, and August sales of $72,000. Note that 10% of each month's sales is expected to represent cash sales; 75% of the balance is expected to be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is expected to be uncollectible. What is the amount of cash to be collected in the month of July? Multiple Choice $69,702 $80,890. $73,494 $73,920.
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 Model Company is to begin operations in April. It has budgeted April sales of $64,000, May sales of $68,000, June sales of $74,000, July sales of $76,000, and August sales of $72,000. Note that 10% of each month's sales is expected to represent cash sales; 75% of the balance is expected to be collected in the month following the sale, 17% the second month, 6% the third month, and the balance is expected to be uncollectible.
What is the amount of cash to be collected in the month of July?
Multiple Choice
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$69,702
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$80,890.
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$73,494
-
$73,920.
The cash budget is prepared to record the cash receipts and payment made during the period. 8
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