Exercise 20-16 Merchandising: Cash budget LO P1 Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow: July August September Budgeted sales 64,000 80,000 48,000 34,400 Budgeted cash payments for merchandise 40,400 33,600 Sales are 20% cash and 80% 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; $45,000 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. Ifan excess balance of cash exists, loans are repaid at the end of the month. 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) (1) Prepare a cash receipts budget for July, August, and September. July September August 64,000 80,000 48,000 Total sales 51,200 64,000 38,400 20% Cash sales 80% Credit sales KELSEY Cash Receipts Budget For July, August, and September September July August 38,400 64,000 51,200 Cash sales Collections of accounts receivable Total cash receipts