Wolfpack Company Balance Sheet June 30 Assets Cash.. $ 75,000 Accounts receivable. Inventory...... Buildings and equipment, net of depreciation. 50,000 30,000 150,000 Total assets... $305,000 Liabilities and Stockholders' Equity Accounts payable. Retained earnings... $ 35,300 269,700 Total liabilities and stockholders' equity $305,000
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.
Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information:
Budgeting Assumptions:
1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The
2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase.
3. The budgeted inventory balance at July 31 is $22,000.
4.
5. The company’s
Required:
1. For the month of July, calculate the following:
a. Budgeted sales
b. Budgeted merchandise purchases
c. Budgeted cost of goods sold
d. Budgeted net operating income
2. Prepare a budgeted balance sheet as of July 31.
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