Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,780,000 Quarter 2 5,690,000 Quarter 3 630,000 Quarter 4 8,200,000
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.
2.
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:
| Quarter 1 | $4,780,000 |
| Quarter 2 | 5,690,000 |
| Quarter 3 | 630,000 |
| Quarter 4 | 8,200,000 |
In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,080,000 and for the fourth quarter of the current year are $7,220,000.
Required:
Question Content Area
1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year.
| Quarter | Cash Sales | Credit Sales |
| 3, current year | $fill in the blank b0590a054f99004_1 | $fill in the blank b0590a054f99004_2 |
| 4, current year | fill in the blank b0590a054f99004_3 | fill in the blank b0590a054f99004_4 |
| 1, next year | fill in the blank b0590a054f99004_5 | fill in the blank b0590a054f99004_6 |
| 2, next year | fill in the blank b0590a054f99004_7 | fill in the blank b0590a054f99004_8 |
| 3, next year | fill in the blank b0590a054f99004_9 | fill in the blank b0590a054f99004_10 |
| 4, next year | fill in the blank b0590a054f99004_11 | fill in the blank b0590a054f99004_12 |
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