Eastern Auto Parts Inc. has 30 percent of its sales paid for in cash and 70 percent on credit. All credit accounts are collected in the following month. Assume the following sales: January $ 80,000 February 70,000 March 115,000 April 60,000 Sales in December of the prior year were $90,000. Prepare a cash receipts schedule for January through April.
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.
Eastern Auto Parts Inc. has 30 percent of its sales paid for in cash and 70 percent on credit. All credit accounts are collected in the following month.
Assume the following sales:
| January | $ | 80,000 |
| February | 70,000 | |
| March | 115,000 | |
| April | 60,000 | |
Sales in December of the prior year were $90,000.
Prepare a cash receipts schedule for January through April.
Cash budget means expected cash receipts and expected cash payment with opening and closing cash balances. Necessary calculation has been done.
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