solution_ch7 - A master budget consists of the following...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
A master budget consists of the following budgets which ar Sales Budget June July August Total Credit sales 630,000 360,000 360,000 1,350,000 Cash sales 70,000 40,000 40,000 150,000 Total sales 700,000 400,000 400,000 1,500,000 Schedule of Cash Collections 80% in the following month and 20% in the second month June July August Cash sales 70,000 40,000 40,000 On accounts receivable from: April sales 54,000 - - May sales 252,000 63,000 - June sales - 504,000 126,000 July sales - - 288,000 Total collections 376,000 607,000 454,000 Purchases Budget May June July August 62% of next month sales 434,000 248,000 248,000 186,000 Disbursement for Purchases June July August Paid in the month following the sale 434,000 248,000 248,000 Balance in the Accounts Payable 186,000 This would be paid Operating Expenses Budget June July August Salaries, Wages and Commission 140,000 80,000 80,000 20% of sales Other variable cost 28,000 16,000 16,000 4% of sales Fixed Expenses 55,000 55,000 55,000 Total Operating Expense 223,000 151,000 151,000 Mall of America Better Buy Electronic Store Budgeted Income Statement For the Three Months Ending August 31, 20X8 Sales 1,500,000 Cost of goods sold (.62 x $1,500,000) 930,000 Gross profit 570,000 Operating expenses: Salaries, wages, commissions 300,000 Other expenses 60,000 Depreciation 7,500 Rent, taxes and other fixed expenses 165,000 532,500 Income from operations. 37,500 Interest expense 6,600 The interest on th Net income 30,900 This is given as $2,500 p month The remaining
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Mall of America Better Buy Electronic Store Cash Budget For the Three Months Ending August 31, 20X8 June July August Beginning cash balance 29,000 25,000 25,600 Minimum cash balance desired 25,000 25,000 25,000 (a) Available cash balance 4,000 - 600 Cash receipts & disbursements: Collections from customers 376,000 607,000 454,000 Calculated earlier Payments for merchandise (434,000) (248,000) (248,000) Calculated earlier Fixtures (55,000) As given in the qu
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/13/2010 for the course MECH 17657 taught by Professor Ravikant during the Spring '10 term at Indian Institute of Technology, Delhi.

Page1 / 10

solution_ch7 - A master budget consists of the following...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online