On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November, and December. All of Molloy's sales are made on account. The following information was used in preparing estimated cash collections: August sales (actual) $ 40,000 September sales (actual) $ 50,000 October sales (estimated) $ 20,000 November sales (estimated) $ 70,000 December sales (estimated) $ 60,000 - Approximately 60% of all sales are collected in the month of the sale, 30% is collected in the following month, and 10% is collected in the month thereafter. (SHOW ALL CALCULATIONS! Points will be deducted if only the answer amount is given.) a. Budgeted collections from customers in October will total how much? b. Budgeted collections from customers in November will total how much? c. Budgeted collections from customers in December will total how much?
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.
4. On October 1 of the current year, Molloy Corporation prepared a
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August sales (actual) |
$ |
40,000 |
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September sales (actual) |
$ |
50,000 |
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October sales (estimated) |
$ |
20,000 |
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November sales (estimated) |
$ |
70,000 |
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December sales (estimated) |
$ |
60,000 |
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Approximately 60% of all sales are collected in the month of the sale, 30% is collected in the following month, and 10% is collected in the month thereafter.
(SHOW ALL CALCULATIONS! Points will be deducted if only the answer amount is given.)
a. Budgeted collections from customers in October will total how much?
b. Budgeted collections from customers in November will total how much?
c. Budgeted collections from customers in December will total how much?
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