XYZ Company has budgeted sales for the next six months as follows: March April May June July August Budgeted Sales $408,000 $366,000 $392,000 $424,000 $386,000 $418,000 15% of the company's sales are cash sales and 85% of the company's sales are made on account. On average, 12% of the sales on account are collected in the month of sale, 28% is collected in the month following sale, 44% is collected in the second month following sale, and the remaining 16% is collected three months after the month of sale. Calculate the budgeted accounts receivable balance at August 31.
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.
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