The Ang KonTi Manufacturing Co. of Quezon City opened a branch at Davao City on January 1, 1988, to expand the market of its product. Merchandise shipped during 1988 to the Davao branch totaled ₱104,000, and this included a profit of 25% based on cost. At the end of the year, the inventory was ₱12,500, at billed price. The branch extends credit, makes collections and pay expenses from cash received. The company applied the periodic inventory method. Other transactions affecting the branch are as follows: Sales on account ₱117,000; expenses ₱20,000, of which ₱1,300 were unpaid on December 31, 1988; cash received from customers' accounts, ₱84,000, after allowing cash discounts of ₱1,480; cash remitted to the home office during the year ₱65,000. In so far as the home office is concern, the true income or loss of the branch operation was:
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.
The Ang KonTi Manufacturing Co. of Quezon City opened a branch at Davao City on
January 1, 1988, to expand the market of its product. Merchandise shipped during 1988
to the Davao branch totaled ₱104,000, and this included a profit of 25% based on cost.
At the end of the year, the inventory was ₱12,500, at billed price. The branch extends
credit, makes collections and pay expenses from cash received. The company applied
the periodic inventory method.
Other transactions affecting the branch are as follows:
Sales on account ₱117,000; expenses ₱20,000, of which ₱1,300 were unpaid on
December 31, 1988; cash received from customers' accounts, ₱84,000, after allowing
cash discounts of ₱1,480; cash remitted to the home office during the year ₱65,000. In
so far as the home office is concern, the true income or loss of the branch
operation was:
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