A client of a small business comes to you and asks for help with budgeting. The business owner, Taylor, is looking for funds to finance a food truck operation. Taylor has an investor who is interested in offering financing and would like to see a master budget plan for the food truck’s first year of operations. Taylor comes to your accounting business and asks for help with creating a master budget to show the investor.

Taylor is a chef and knows how to prepare food, but does not know much about budgets. He needs the budget plan in three days. Before Taylor goes, he leaves a small piece of paper on your desk. It says $500,000 sales, $100,000 earnings. You begin to plan. How will you prepare the master budget for Taylor’s business?

• Do you have enough information to prepare the master budget?
• If not, where will you get the information needed?
• How will you put the information together and present it to Taylor?
• How will you know if it is a good master budget?

Given your understanding of preparing a master budget, explain how you would begin the process. Address the four bullet items above.

Answer rating: 100% (QA)

Master Budget is basically the total of all the budgets prepared by different functional departments Moreover it includes the income statement balance sheet sales budget production budget purchases bu... View the full answer