Cautious Company has the following sales projection (in units) for the next six months: Feb: 11000 Mar: 12500 Apr: 10000 May: 13500 Jun: 11500 Jul: 9000 Each unit sells for $26 through April and $29 starting in May. Cautious has prepared the following sales budget for the quarter of April, May and June: Sales Budget April Sales in units 10000 Selling price per unit x $26 Sales revenue Total 35000 11500 May June 13500 x $29 x $29 $260000 $391500 $333500 $985000 All of the sales are on credit. Cautious collects from customers as follows: 50% of sales in the month of sale 25% in the month following the sale, and 25% in the second month following the sale Prepare a cash receipts budget on paper or in Excel for the quarter of April, May and June. What is budgeted cash receipts in June?
Cautious Company has the following sales projection (in units) for the next six months: Feb: 11000 Mar: 12500 Apr: 10000 May: 13500 Jun: 11500 Jul: 9000 Each unit sells for $26 through April and $29 starting in May. Cautious has prepared the following sales budget for the quarter of April, May and June: Sales Budget April Sales in units 10000 Selling price per unit x $26 Sales revenue Total 35000 11500 May June 13500 x $29 x $29 $260000 $391500 $333500 $985000 All of the sales are on credit. Cautious collects from customers as follows: 50% of sales in the month of sale 25% in the month following the sale, and 25% in the second month following the sale Prepare a cash receipts budget on paper or in Excel for the quarter of April, May and June. What is budgeted cash receipts in June?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Cautious Company has the following sales projection (in units) for the next six months:
Feb: 11000
Mar: 12500
Apr: 10000
May: 13500
Jun: 11500
Jul: 9000
Each unit sells for $26 through April and $29 starting in May.
Cautious has prepared the following sales budget for the quarter of April, May and June:
Sales Budget
April
Sales in units
Selling price per unit x $26
Sales revenue
10000
$260000
May
13500
11500
x $29
x $29
$391500 $333500 $985000
June
Total
35000
All of the sales are on credit. Cautious collects from customers as follows:
50% of sales in the month of sale
25% in the month following the sale, and
25% in the second month following the sale
Prepare a cash receipts budget on paper or in Excel for the quarter of April, May and June.
What is budgeted cash receipts in June?
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