Information pertaining to Yekstop Corp.'s sales revenue is presented below: November December January Cash sales $ 96,000 $ 125,000 $ 78,000 Credit sales 288,000 450,000 234,000 Total sales $ 384,000 $ 575,000 $ 312,000 Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices. Budgeted cash payments in November for November inventory purchases by Yekstop Corp. are:
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.
Information pertaining to Yekstop Corp.'s sales revenue is presented below:
| November | December | January | |||||||||
| Cash sales | $ | 96,000 | $ | 125,000 | $ | 78,000 | |||||
| Credit sales | 288,000 | 450,000 | 234,000 | ||||||||
| Total sales | $ | 384,000 | $ | 575,000 | $ | 312,000 | |||||
Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.
Budgeted cash payments in November for November inventory purchases by Yekstop Corp. are:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
