Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2020. In May, credit sales were $175,000; 80% of this amount is estimated to be collectible in June. June sales are estimated to be $340,000, all of which are credit sales. Only 20% of credit sales are collected in the month in which the sale is made. Total fixed expenses are $60,000 per month, including $26,000 depreciation. Variable expenses are 35% of sales. All expenses requiring payment are paid in cash when incurred. A $40,000 note payable must be paid on June 30. As of May 31, the cash balance is $94,000.
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.
Use the following information to prepare a
In May, credit sales were $175,000; 80% of this amount is estimated to be collectible in June.
June sales are estimated to be $340,000, all of which are credit sales. Only 20% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month, including $26,000
A $40,000 note payable must be paid on June 30.
As of May 31, the cash balance is $94,000.
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