Question
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: July August September Budgeted sales $ 60,500 $ 76,500 $ 51,500 Budgeted cash
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
July | August | September | |
---|---|---|---|
Budgeted sales | $ 60,500 | $ 76,500 | $ 51,500 |
Budgeted cash payments for | |||
Direct materials | 16,860 | 14,140 | 14,460 |
Direct labor | 4,740 | 4,060 | 4,140 |
Overhead | 20,900 | 17,500 | 17,900 |
Sales to customers are 30% cash and 70% on credit. Sales in June were $61,000. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $29,000 in cash and $5,700 in loans payable. A minimum cash balance of $29,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $29,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. Any preliminary cash balance above $29,000 is used to repay loans at month-end. Expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,700 per month), and rent ($7,200 per month).
2. Prepare a cash budget for the months of July, August, and September. Then, fill out the loan balance (both tables shown below).
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Enter your final answers in whole dollars.
2. Prepare a cash budget for the months of July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Enter your final answers in whole dollars. \begin{tabular}{|l|l|l|l|} \hline & & \\ \hline & & & \\ \hline & & & \\ \hline Loan balance - Beginning of month & & & \\ \hline Additional loan (loan repayment) & & & \\ \hline Loan balance - End of month & & & \\ \hline \end{tabular}
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