Trapp Co. was organized on August 1 of the current year. Projected sales for the first three months are: August - $100,000; September - $185,000; October - $225,000. The company expects to sell 40% of its merchandise for cash. Of the sales on account, one-third is expected to be collected in the month of the sale and the remainder in the following month. 1.)What would be the amount collected from accounts receivable in the month of August from the August sales on account (credit sales for August x .333)? 2.)What would be the amount collected from accounts receivable in the month of September from the September sales on account (credit sales for September x .333)? 3.)What would be the total amount collected from accounts receivable in the month of September [(credit sales for September x .333) + (credit sales for August x .667)]?
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.
Trapp Co. was organized on August 1 of the current year. Projected sales for the first three months are: August - $100,000; September - $185,000; October - $225,000. The company expects to sell 40% of its merchandise for cash. Of the sales on account, one-third is expected to be collected in the month of the sale and the remainder in the following month.
1.)What would be the amount collected from
2.)What would be the amount collected from accounts receivable in the month of September from the September sales on account (credit sales for September x .333)?
3.)What would be the total amount collected from accounts receivable in the month of September [(credit sales for September x .333) + (credit sales for August x .667)]?
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