Question
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: July August September Budgeted sales $ 56,000 $ 72,000 $ 56,000 Budgeted cash
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
July | August | September | |
---|---|---|---|
Budgeted sales | $ 56,000 | $ 72,000 | $ 56,000 |
Budgeted cash payments for | |||
Direct materials | 15,560 | 12,840 | 13,160 |
Direct labor | 3,440 | 2,760 | 2,840 |
Overhead | 19,600 | 16,200 | 16,600 |
Sales to customers are 20% cash and 80% on credit. Sales in June were $53,500. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $47,000 in cash and $4,400 in loans payable. A minimum cash balance of $47,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $47,000. 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 $47,000 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 ($3,400 per month), and rent ($5,900 per month).
1. Prepare a schedule of cash receipts for the months of July, August, and September
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