Use the information provided below to prepare the following for January and February 2023: 4.2)Cash Budget INFORMATION The following information was provided by Intel Enterprises: 1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable). 2. Credit sales are expected to be as follows: December 2022 January 2023 February 2023 R576 000 R540 000 R648 000 3. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customers receive a 10% discount. 4. Credit sales are normally collected as follows: * 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount. * 65% in the following month The rest is usually written off as bad debts. 5. Budgeted purchases of inventory are as follows: December 2022 January 2023 February 2023 R1 000 000 R800 000 R920 000 6. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase. 7. The monthly salaries amount to R150 000. Salaries are expected to increase by 9% with effect from 01 February 2023 for those employees who presently make up 80% of the salary bill. The salaries of the remaining 20% are expected to increase by 6%. 8. Interest at 18% per annum on the loan balance is paid at the end of each month. The loan balance on 31 December 2022 was R400 000 and a capital repayment of R100 000 will be made on 01 February 2023. 9. Part of the building is sublet to a tenant and rent is collected monthly. The lease agreement for the year ended 31 January 2023 reflected the rental as R180 000 per annum. The rental will increase by 10% with effect from 01 February 2023. 10. Other operating expenses are budgeted at R40 000 per month. This amount includes R5 000 for depreciation. Operating expenses are paid for in the month in which they are incurred.
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.
Use the information provided below to prepare the following for January and February 2023:
4.2)
INFORMATION
The following information was provided by Intel Enterprises:
1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable).
2. Credit sales are expected to be as follows:
December 2022 January 2023 February 2023
R576 000 R540 000 R648 000
3. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customers
receive a 10% discount.
4. Credit sales are normally collected as follows:
* 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount.
* 65% in the following month
The rest is usually written off as
5. Budgeted purchases of inventory are as follows:
December 2022 January 2023 February 2023
R1 000 000 R800 000 R920 000
6. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase.
7. The monthly salaries amount to R150 000. Salaries are expected to increase by 9% with effect from 01
February 2023 for those employees who presently make up 80% of the salary bill. The salaries of the
remaining 20% are expected to increase by 6%.
8. Interest at 18% per annum on the loan balance is paid at the end of each month. The loan balance on 31
December 2022 was R400 000 and a capital repayment of R100 000 will be made on 01 February 2023.
9. Part of the building is sublet to a tenant and rent is collected monthly. The lease agreement for the year
ended 31 January 2023 reflected the rental as R180 000 per annum. The rental will increase by 10% with
effect from 01 February 2023.
10. Other operating expenses are budgeted at R40 000 per month. This amount includes R5 000 for
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