The total budgeted sales of Obaapa Ltd for April, the first month of the second quarter in 2021 were GHS950,000. Sales are expected to increase by GHS50,000 in each month. Cash sales for each month are GHS100,000 and the remaining are credit sales. All the products are sold at a mark up of the cost plus 25 per cent. On average, Obaapa Ltd collects 50 per cent of the credit sales in the month of sale and 45 per cent in the month following sales. The remainder is uncollectible. Determine the budgeted total cash receipt for each month of the second quarter of 2021 and the expected account receivables at the end of the 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 total budgeted sales of Obaapa Ltd for April, the first month of the second quarter in 2021 were GHS950,000. Sales are expected to increase by GHS50,000 in each month. Cash sales for each month are GHS100,000 and the remaining are credit sales. All the products are sold at a mark up of the cost plus 25 per cent. On average, Obaapa Ltd collects 50 per cent of the credit sales in the month of sale and 45 per cent in the month following sales. The remainder is uncollectible. Determine the budgeted total cash receipt for each month of the second quarter of 2021 and the expected
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