Zen Company prepares a monthly master budget. Data for the July master budget are given below. The June 1 Merchandise inventory is 50,000 and accounts payable related to inventory purchases for May is 25,000. Actual sales for June and budgeted sales for July, August, and September are June $137,500 July 360,000 August 400,000 The gross margin percentage is 40 percent of sales. The desired ending merchandise inventory is equal to 25 percent of the following month's sales. One-fourth of the purchases are paid for in the month of purchase, and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000 and the monthly depreciation expenses are $7.000. What are the cash disbursements for June, July, and August?
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.
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