Dominic's, Inc. had actual sales for January and February and forecasted sales for March, April, May and June as follows: Actual: January $192,000 February $218,000 Forecast: March $225,000 April $202,000 May $234,000 June $250,000 Based on company experience, it is estimated that 35 percent of a month's sales are collected in the month of sale, 48 percent in the month following the sale, and 16 percent in the second month following the sale. Calculate the estimated cash collections for March, April, and May.
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.
Dominic's, Inc. had actual sales for January and February and
Actual:
January $192,000
February $218,000
Forecast:
March $225,000
April $202,000
May $234,000
June $250,000
Based on company experience, it is estimated that 35 percent of a month's sales are collected in the month of sale, 48 percent in the month following the sale, and 16 percent in the second month following the sale.
Calculate the estimated cash collections for March, April, and May.
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