Your Mom is Proud of You (YMPY) is preparing their cash budget for the upcoming month of August. Based on historical trends, YMPY estimates that 20% of all sales are paid in cash, with the remaining 80% being paid on credit. Of the credit sales, 60% is collected in the month after the sale, and 40% two months after the sale. Sales information has been provided below: o July sales $346,000 o Expected August sales $220,000 YMPY pays for all operating expenses on credit. 70% of their expenses require cash payment in the month immediately following the expense, and the remaining 30% two months following the expense. Operating expense information has been provided below: o July expenses $98,000 o Expected August expenses $72,000 Using the information provided, answer the following questions. What is the budgeted August cash outflows?
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.
Your Mom is Proud of You (YMPY) is preparing their
o July sales $346,000
o Expected August sales $220,000
YMPY pays for all operating expenses on credit. 70% of their expenses require cash payment in the month immediately following the expense, and the remaining 30% two months following the expense. Operating expense information has been provided below:
o July expenses $98,000
o Expected August expenses $72,000
Using the information provided, answer the following questions.
What is the budgeted August
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
