Please demonstrate which line item on which financial statement will be impacted by 1) Sales Budget;...

Please demonstrate which line item on which financial statement will be impacted by

1) Sales Budget;

2) Production budget;

3) SG&A;

Expert Solution

Sales Budget will impact:-

1. Profit & Loss Statement:- On Profit & Loss Statement, Net Sales / Revenue will be impacted

2. Balance Sheet:- On Balance Sheet, Current Assets in Assets Head (In the form of Debtor Receivables) will be impacted

3. Cash Flow:- On Cash Flow, Cash Flow from Operating Activities (Direct Method: Cash Receipts from Customers) will be impacted

Production Budget will impact:-

1. Profit & Loss Statement:- On Profit & Loss Statement, Cost of Goods Sold will be impacted

2. Balance Sheet:- On Balance Sheet, Current Assets in Assets Head will be impacted

3. Cash Flow:- On Cash Flow, Increase / Decrease in Inventories will be impacted

Selling, General & Administrative Expenses (SG&A):-

1. Profit & Loss Statement:- On Profit & Loss Statement, Expenses will be impacted

2. Balance Sheet:- On Balance Sheet, Current Assets in Assets Head (In the form of Prepaid Expenses) will be impacted

3. Cash Flow:- On Cash Flow, Cash Flow from Operating Activities(indirectly) will be impacted

ekkarill92 answered 1 year ago

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