Lucky Food Stores wishes to prepare a cash budget for the month of April, 2022. Total Sales for February (actual), March and April (estimated) are as follows: Month Total Sales February $48,000 March 40,000 April 45,000 The total budgeted purchases (paid entirely in cash) for April is $22,000. The expenses for April are expected to be $9,500 including $1,000 for depreciation on machinery. All sales are on credit, and the company's experience shows that, on the average, 80 percent of sales are collected in the month of sale, 15% on the month following sale and the balance two months after sale. Calculate the budgeted cash expenses for April 2022.
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.
Lucky Food Stores wishes to prepare a
Month Total Sales
February $48,000
March 40,000
April 45,000
The total budgeted purchases (paid entirely in cash) for April is $22,000. The expenses for April are expected to be $9,500 including $1,000 for
All sales are on credit, and the company's experience shows that, on the average, 80 percent of sales are collected in the month of sale, 15% on the month following sale and the balance two months after sale.
Calculate the budgeted cash expenses for April 2022.
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