The following information is available for Zetrov Company. a. The cash budget for March shows an ending bank loan of $10,000 and an ending cash balance of $50,000. b. The sales budget for March indicates sales of $140,000. Accounts receivable are expected to be 70% of the current-month sales. c. The merchandise purchases budget indicates that $89,000 in merchandise will be purchased on account in March. Purchases on account are paid 100% in the month following the purchase. Ending inventory for March is predicted to be 600 units at a cost of $35 each. d. The budgeted income statement for March shows net income of $48,000. Depreciation expense of $1,000 and $26,000 in income tax expense were used in computing net income for March. Accrued taxes will be paid in April. e. The balance sheet for February shows equipment of $84,000 with accumulated depreciation of $46,000, common stock of $25,000, and ending retained earnings of $8,000. There are no changes budgeted in the Equipment or Common Stock accounts. Prepare a budgeted balance sheet at the end of March.
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.
The following information is available for Zetrov Company.
a. The
b. The sales budget for March indicates sales of $140,000. Accounts receivable are expected to be 70%
of the current-month sales.
c. The merchandise purchases budget indicates that $89,000 in merchandise will be purchased on account
in March. Purchases on account are paid 100% in the month following the purchase. Ending inventory
for March is predicted to be 600 units at a cost of $35 each.
d. The
$1,000 and $26,000 in income tax expense were used in computing net income for March. Accrued
taxes will be paid in April.
e. The balance sheet for February shows equipment of $84,000 with
$46,000, common stock of $25,000, and ending retained earnings of $8,000. There are no changes
budgeted in the Equipment or Common Stock accounts.
Prepare a budgeted balance sheet at the end of March.
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