What is the budgeted cash collections for the month of October? 2. What is the budgeted purchases during October? 3. What is the budgeted gross profit for the month of October? DANK, INC. Balance Sheet September 30, 2015 Assets Cash P 416,000 Accounts receivable, net 1,200,000 Merchandise inventory 2,520,000 Non-current assets 8,000,000 Total assets P 12,136,000 Liabilities and Equity Accounts payable P 1,400,000 Capital stock 7,200,000 Retained earnings 3,536,000 Total liabilities and Stockholders’ equity P 12,136,000 Additional information: • Budgeted sales for October is P 4,160,000; for November, P 4,000,000 • Gross profit rate is 20% • Of the total sales, 40% is on credit which the company collects in the month following the month of sale. • Purchases in each month are composed of: 80% of the coming month’s requirement 20% of the current month’s requirement • Purchases are paid for in the month following the month of purchase
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.
1. What is the budgeted cash collections for the month of October?
2. What is the budgeted purchases during October?
3. What is the budgeted gross profit for the month of October?
DANK, INC.
Balance Sheet
September 30, 2015
Assets
Cash P 416,000
Merchandise inventory 2,520,000
Non-current assets 8,000,000
Total assets P 12,136,000
Liabilities and Equity
Accounts payable P 1,400,000
Capital stock 7,200,000
Total liabilities and
Additional information:
• Budgeted sales for October is P 4,160,000; for November, P 4,000,000
• Gross profit rate is 20%
• Of the total sales, 40% is on credit which the company collects in the month following the month
of sale.
• Purchases in each month are composed of:
80% of the coming month’s requirement
20% of the current month’s requirement
• Purchases are paid for in the month following the month of purchase
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