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20.5 Bullt-Tight is preparing its master budget for the quarter ended September 30 . Budgeted sales and cash payments for product costs for the quarter
20.5
Bullt-Tight is preparing its master budget for the quarter ended September 30 . Budgeted sales and cash payments for product costs for the quarter follow. Sales are 30% cash and 70% on credit. All credit sales are collected In the month following the sale. The June 30 balance sheet Includes balances of $15,000 in cash; $45,600 in accounts recelvable; and a $5,600 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. If an excess balance of cash exists, loans are repald at the end of the month. Operating expenses are pald In the month Incurred and consist of sales commissions ( 10% of sales), office salarles ( $4,600 per month), and rent ( $7,100 per month). 1. Prepare a cash recelpts budget for July, August, and SeptemberStep by Step Solution
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