Prepare a Schedule of Expected Cash Collections for November and December. Prepare a Merchandise Purchases Budget for November and December. Prepare Cash Budgets for November and December.
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.
- Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:
- Sales are budgeted at $390,000 for November, $370,000 for December, and $380,000 for January.
- Collections are expected to be 90% in the month of sale, 5% in the month following the sale, and 5% uncollectible.
- The cost of goods sold is 60% of sales.
- The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase.
- Other monthly expenses to be paid in cash are $21,800.
- Monthly
depreciation is $18,000. - Ignore taxes.
Required:
- Prepare a Schedule of Expected Cash Collections for November and December.
- Prepare a Merchandise Purchases Budget for November and December.
- Prepare
Cash Budgets for November and December. - Prepare
Budgeted Income Statements for November and December. - Prepare a Budgeted Balance Sheet for the end of December.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
