Create a cash budget from April to July based on the following information. Unit sales for April = $9,000, May = 10,200, June =11,544, July = 12,049 Selling price per unit is $3.05. Sales are 50% credit and 50% cash. Sales terms are net 30 days Cost of Goods per unit is $1.95. Terms of Purchase are net 30 days Opening Accounts Payable balance in Apr is $5,000 and the Opening Cash balance is 10,000 A minimum cash balance of $3,000 is required at all times Expenses are 45% of Sales and are paid in the month they are incurred The company will be
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.
Create a
Unit sales for April = $9,000, May = 10,200, June =11,544, July = 12,049
Selling price per unit is $3.05.
Sales are 50% credit and 50% cash.
Sales terms are net 30 days
Cost of Goods per unit is $1.95.
Terms of Purchase are net 30 days
Opening Accounts Payable balance in Apr is $5,000 and the Opening Cash balance is 10,000
A minimum cash balance of $3,000 is required at all times
Expenses are 45% of Sales and are paid in the month they are incurred
The company will be purchasing new equipment for $12,000 and must pay for in Apr
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