Using tha above information, prepare the following: 1. Prepare a cash receipts budget for the six months 2. Prepare a cash payments budget for the six months 3. Prepare a budgeted pfofit and loss to Gross Profit for the six months
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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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- Kent Corner Shoppe is a local convenience store with the following information: October sales were $250,000. Sales are projected to go up by 12% in November and another 30% in December and then return to the October level in January. 20% of sales are made in cash, while the remaining 80% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 2% transaction fee and deposit the net amount (sales price less the transaction fee) in the store’s bank account daily. Kent Corner Shoppe’s gross profit is 25% of its sales revenue. For the next several months, the store wants to maintain an ending merchandise inventory equal to $15,000+15%$15,000+15% of the next month’s cost of goods sold. The September 30 inventory was $43,125. Expected monthly operating expenses include: Wages of store workers are $9,200 per month Utilities expense of $1,000 in November and $1,500 in December Property tax expense of $2,000 per month Property and liability…Nonnas Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?Sullivan Corner Shoppe is a local convenience store with the following information: October sales were $260,000. •Sales are projected to go up by 8% in November (from the October sales) and another 25% in December (from the November sales) and then return to the October level in January. •25% of sales are made in cash, while the remaining 75% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 4% transaction fee, and deposit the net amount (sales price less the transaction fee) in the store's bank account daily. • Sullivan Corner Shoppe's gross profit is 30% of its sales revenue. • For the next several months, the store wants to maintain an ending merchandise inventory equal to $16,000 + 20% of the next month's cost of goods sold. The September 30 inventory was $52,400. •Expected monthly operating expenses include: •Wages of store workers are $8,500 per month •Utilities expense of $1,800 in…
- Sara is considering whether to open a gadgets shop. She provided you, as a consultant, the following information: Sales of $60,000 and $72,000 are expected for July and August, respectively. All goods are sold on account. The collection pattern for Accounts Receivable is 80 percent in the month of sale and 20 percent in the month following the sale. Purchases of $40,000 and $54,000 are expected for July and August. The payment pattern for purchases is 70 percent in the month of purchase, 30 percent in the month following the purchase. Other monthly expenses are $8,000, which includes $2000 of depreciation. All operating expenses are paid in the month of their incurrence. $2,000 of cash is available on August 1, 2021. Required: Prepare the cash collection budget for the two months ending August 31, 2021 Prepare the cash budget for the two months ending August 31, 2021The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totalling $10,000 are deposited during August. What increases when recording the sales and deposits? accounts receivable by $9,854 service charge expense by $155 sales by $ 9,854 cash by $10,000My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?
- Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?Yeopay Plumbing Supply accepts bank credit cards and offers established plumbers charge accounts with terms of 1/eom, n/45. Yeopay's experience is that 25% of its sales are for cash and bank credit cards. The remaining 75% are on credit. Of the cash sales, 40% pay cash and the remaining 60% pay with bank credit cards. Yeopay receives payments from the bank on credit card sales at the end of the day. However, Yeopay has to pay 3% for these services. An aging schedule for accounts receivable shows the following pattern on credit sales: 20% pay in the month of sale. 50% pay in the first month following the month of sale. 15% pay in the second month following the month of sale. 12% pay in the third month following the month of sale. 3% are never collected. All accounts not paid by the end of the second month following the month of sale are considered overdue and are subject to a 5% monthly late charge. Yeopay has prepared the following sales forecasts: June July August $ 78,000 116,000…Marlin Company projects the follwoing sales for the first thre months of the year: $11500 in January; $10100 in February and $10400 in March. the company expects 60% of the sales to be cash and the remainder on accounts. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Account Receivable account has a zero on January. 1. Prepare a schedule of cash receipts for Marlin for January, February and March. What is the balance in Accounts Receivable on March 31? 2. Prepare a revised schedule of cash receipts if receipts from sales on account are 70% in the month of the sale, 20% in the following month of the sale and 10% in the second month of the sale. What is the balance in Accounts Receivable on March 31?
- A home gods retailer offers a sales incentive program where customers receive credit towards future purchases based on the dollar amount of their purchases today. For every $10 spent, a customer receives a $1 credit to use in the next 30 days. Based upon historical trends, the firm estimates that 35% of the credits will be redeemed. In the next month, consistent with the firm’s estimate, 35% of the credits were redeemed. The entry recorded to account for the redemption of these credits (excluding the effect of the costs of sales entry): A.) Increases Liabilities, Increases Stockholders’ Equity B.) Increases Liabilities, Reduces Stockholders’ Equity C.) Reduces Liabilities, Reduces Stockholders’ Equity D.) Reduces Liabilities, Increases Stockholders’ Equity C.) No entry neededPreparing a Schedule of Cash Collections on Accounts Receivable Kailua and Company is a legal services firm. All sales of legal services are billed to the client (there are no cash sales). Kaillua expects that, on average, 20% will be paid in the month of billing, 509 will be paid in the month following billing, and 25% will be paid in the second month following billing. For the next 5 months, the following sales bilings are expected: May $84,000 June 100,800 July 77,000 August 86,800 September 91,000 Required: Prepare a schedule showing the cash expected in payments on accounts receivable in August and in September. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers. Kailua and Company Schedule August September June: 25,200 July: 38,500 19,250 August 43,050 17,220 September 17,800 80,920 80,100 Total cash receipts ,0.00.00MHusam Trading Company is in the business of buying and selling of different types of electronics products in Nizwa region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: - January February March April May June July 125,000 135,000 148,200 175,800 125,900 129,100 115,200 The sales reported every month including cash sales and credit sales. Cash sales constitute 50% of total sales collected in the month of sales and the balance is credit sales received in two months following the month of sales. The detail of goods purchased in cash during seven months reported in purchase book as below: - January February March April May June July 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month…