Pasol Company has just prepared its master budget for the year 2015. Some of the information used in the preparation of such budget is as follows: 1. Budgeted sales: January P 480,000 February 520,000 March 560,000 April 500,000 May 576,000 June 640,000 2. Twenty percent of total sales is cash sales. The collections pattern for the sales on credit is as follows: 30% in the month of sale 40% in the month after the month of sale 25% in the second month after the month of sale 3. Pasol Company’s gross margin rate is 60% of sales. 4. Accounts payable arising from merchandise purchases is paid for in the month following the purchase 5. The company desires an inventory at the end of each month equal to 30% of the next month’s sales in units. 6. The variable operating expenses (other than cost of goods sold) are 10% of sales and are paid for in the month following the sale. 7. The annual fixed operating expenses are as follows: Depreciation P 336,000 Advertising 576,000 Insurance 144,000 Salaries 864,000 Property taxes 192,000 8. All of the fixed operating expenses are incurred uniformly throughout the year. Cash fixed operating expenses are paid in the month of incurrence, except for: - Insurance – paid quarterly in January, April and July - Property taxes – paid twice a year in April and October A. The budgeted cash collections in March for the sales made in March is B. The budgeted cash receipts for the month of April is C. The budgeted purchases of merchandise for February is D. budgeted cash disbursements for operating expenses (other than cost of goods sold) during the month of April is E. The budgeted cash disbursements to be made in April for merchandise purchases is F. Assume that the expected cash balance at the beginning of April is P 51,600. How much is the budgeted cash balance as of April 30?
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.
Pasol Company has just prepared its
preparation of such budget is as follows:
1. Budgeted sales: January P 480,000
February 520,000
March 560,000
April 500,000
May 576,000
June 640,000
2. Twenty percent of total sales is cash sales. The collections pattern for the sales on credit is as
follows:
30% in the month of sale
40% in the month after the month of sale
25% in the second month after the month of sale
3. Pasol Company’s gross margin rate is 60% of sales.
4. Accounts payable arising from merchandise purchases is paid for in the month following the
purchase
5. The company desires an inventory at the end of each month equal to 30% of the next month’s
sales in units.
6. The variable operating expenses (other than cost of goods sold) are 10% of sales and are paid for
in the month following the sale.
7. The annual fixed operating expenses are as follows:
Advertising 576,000
Insurance 144,000
Salaries 864,000
Property taxes 192,000
8. All of the fixed operating expenses are incurred uniformly throughout the year. Cash fixed
operating expenses are paid in the month of incurrence, except for:
- Insurance – paid quarterly in January, April and July
- Property taxes – paid twice a year in April and October
A. The budgeted cash collections in March for the sales made in March is
B. The budgeted cash receipts for the month of April is
C. The budgeted purchases of merchandise for February is
D. budgeted cash disbursements for operating expenses (other than cost of goods sold) during the month of April is
E. The budgeted cash disbursements to be made in April for merchandise purchases is
F. Assume that the expected cash balance at the beginning of April is P 51,600. How much is the budgeted cash balance as of April 30?
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