Miller Corporation has the following sales budget for the third quarter of 2021: Month Sales July $400,000 August $320,000 September $500,000 Historically, the following trend has been established regarding cash collection of sales: 60 percent of sales are paid in month of sale 35 percent of sales are paid in month following the sale 5 percent of sales are uncollectible and are written off in the month following the sale The expected total cash receipts for the month of September is: A. $300,000. B. $25,000. C. $112,000. D. $412,000.
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.
Miller Corporation has the following sales budget for the third quarter of 2021:
Month Sales
July $400,000
August $320,000
September $500,000
Historically, the following trend has been established regarding cash collection of sales:
60 percent of sales are paid in month of sale
35 percent of sales are paid in month following the sale
5 percent of sales are uncollectible and are written off in the month following the sale
The expected total cash receipts for the month of September is:
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