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. Budgeted July August September Sales $64,000 $80,000 $48,000 Cash payments for merchandise 40,400 33,600 34,400 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. If an 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. (2) Prepare a cash budget for each of the months of July, August, and September. (Round all dollar amounts to the nearest whole dollar.) 3 4 Kelsey Cash Receipts Budget For July, August and September 5 6 7 8 Sales 9 Less Ending Accounts Receivable 10 Cash receipts from 11 Cash sales 12 Collections from prior months 13 Total cash receipts 14 15 16 17 18 19 20 4 5 Kelsey Cash Budget For July, August and September 6 7 8 9 July August September 10 11 Beginning Cash balance 12 Cash Receipt from (req 1) 13 Total Cash Available 14 15 Cash disbursement 16 Payment for Merchandise 17 Sales Commissions 18 OfficeSalaries 19 Rent 20 Interest on bank loan 21 For July 22 For August 23 Preliminar cash balance 24 Additional Loan from bank 25 Repayment of loan to bank 26 Ending cash balance 27 28 Loan balance End of month 29 30 31