The sales on account have been budgeted for last seven month as follow: Budgeted unit sales June July August September October November December 49,000 60,000 70,000 80,000 90,000 100,000 85,000 Mynor corporation manufacturer has following historical collection pattern for its credit sales.70% collected in the month of sales, 15% in the first month collected after sale, 10% collected in the second month after sale, 4% collected in the third month after sale and 1 % uncollectible. Required: Compute the estimated total cash collection during October from credit sales. Compute the estimated total cash collection during the fourth quarter from sales made on account during the fourth quarter.
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 sales on account have been budgeted for last seven month as follow:
|
Budgeted unit sales |
June |
July |
August |
September |
October |
November |
December |
|
49,000 |
60,000 |
70,000 |
80,000 |
90,000 |
100,000 |
85,000 |
Mynor corporation manufacturer has following historical collection pattern for its credit sales.70% collected in the month of sales, 15% in the first month collected after sale, 10% collected in the second month after sale, 4% collected in the third month after sale and 1 % uncollectible.
Required:
- Compute the estimated total cash collection during October from credit sales.
- Compute the estimated total cash collection during the fourth quarter from sales made on account during the fourth quarter.
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