Use the following information to prepare a budgeted income statement for Stellar Company for the month of June. Beginning cash balance on June 1 is $52,000. Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000. Cost of goods sold is 53% of sales. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30. Budgeted depreciation expense for June: $24,000. Other cash expenses budgeted for June: $282,000. Accrued income taxes due in June: $48,000. Bank loan interest due in June: $8,000 which represents the 1% monthly expense on a bank loan of $800,000. The income tax rate applicable to the company is 30%.
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.
Use the following information to prepare a
- Beginning cash balance on June 1 is $52,000.
- Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
- Cost of goods sold is 53% of sales.
Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30.- Budgeted depreciation expense for June: $24,000.
- Other cash expenses budgeted for June: $282,000.
- Accrued income taxes due in June: $48,000.
- Bank loan interest due in June: $8,000 which represents the 1% monthly expense on a bank loan of $800,000.
- The income tax rate applicable to the company is 30%.
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