Built-Tight is preparing its master budget for the quarter ended September 30, 2015. Budgeted sales and cash payments for product cost for the quarter follow:
July
August
September
Budgeted sales
$64,000
$80,000
$48,000
Budgeted cash payments for:
Direct materials
16,160
13,440
13,760
Direct labor
4,040
3,360
3,440
Factory overhead
20,200
16,800
17,200
Sales are 20% cash and 80 credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash; $45,000 in accounts receivable; $4,500 in accounts payable; and a $5,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning of the month loan balance and is paid at each month-end. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,000 per month), and rent ($6,500 per month).
Required
Prepare a cash receipts budget for July, August, and September.
Prepare a cash budget for each of the months of July, August, and September. (Round amounts to the dollar).
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