Soup Inc. has the following budgeted sales: January $60,000, February $80,000, and March $90,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 75% are collected in the month of sale, and 25% the next month. The total budgeted cash receipts for March are:
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.
We discuss how to prepare the
relationships among the operating budgets, cash budget, and
budgeted balance sheet. The cash budget helps managers
determine whether they need to borrow money to fund operations,
or whether they can make repayments toward their borrowings or
invest excess cash to earn interest. The cash budget and the
budgeted balance sheet are forward-looking versions of the
statement of cash flows and the balance sheet.
Soup Inc. has the following budgeted sales: January $60,000, February
$80,000, and March $90,000. 40% of the sales are for cash and 60% are on
credit. For the credit sales, 75% are collected in the month of sale, and 25% the
next month. The total budgeted cash receipts for March are:
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