Xi sells fruit and vegetables from his market stall for cash. His budgeted sales for February, March and April are $45,000, $50,000 and $55,000 respectively. His suppliers allow him one month's credit in which to pay for the fruit and vegetables that he sells. His purchases cost is budgeted to be 80% of the sales value of his produce. Xi rents his market stall at a cost of $1,000 per month, payable on the first day of each month. Electricity costs for his market stall amount to $200 per month and he pays for these quarterly in March, June, September and December. Xi withdraws $2,000 a month from his business for his own personal expenses. What is Xi's net cash inflow for March? 1. Prepare a cash flow statement 2. Calculate the cash inflow 3. Explain your calculations 4. Provide your analysis
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.
![Xi sells fruit and vegetables from his market stall for cash. His budgeted sales for February, March and
April are $45,000, $50,000 and $55,000 respectively. His suppliers allow him one month's credit in
which to pay for the fruit and vegetables that he sells. His purchases cost is budgeted to be 80% of the
sales value of his produce. Xi rents his market stall at a cost of $1,000 per month, payable on the first
day of each month. Electricity costs for his market stall amount to $200 per month and he pays for these
quarterly in March, June, September and December. Xi withdraws $2,000 a month from his business for
his own personal expenses.
What is Xi's net cash inflow for March?
1. Prepare a cash flow statement
2. Calculate the cash inflow
3. Explain your calculations
4. Provide your analysis](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4d39a1d-19a3-4561-abdb-31a4f70ab1f3%2Fb9c8d7ee-0f16-4e12-9b56-bd7e514ba668%2F9lkiqm_processed.png&w=3840&q=75)
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