}The master budget is the overall budget into which all the subsidiary budgets are consolidated.
}It will normally comprise a budgeted statement of profit or loss and a budgeted statement of financial position (and possibly also a budgeted cash flow statement).
Example 1
}Hash makes one product the Brown. Salesfor next year are budgeted at 5,000 units of Brown. Planned selling price is$230.
}Hash expects to have the followingopening inventory and required closing inventory levels of finished products:
}The opening Statement of financialposition is expected to be as follows:
}Non-current assets in the statement of financial position are expected to increase by $40,000, but no change isexpected in trade receivables, trade payables and other short-term liabilities.
}There are no plans at this stage to raise extra capital by issuing new shares or obtaining new loans. The companycurrently has an overdraft facility of $300,000 with its bank.
}Required
}Complete the following
}Budgeted Statement of profit or loss
}Budgeted Statement of financial position
