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		$	63,100				$	80,900				$	48,900
Cash payments for merchandise			42,200					32,700					33,500

Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $13,200 in cash; $48,300 in accounts receivable; $5,400 in accounts payable; and a $2,900 balance in loans payable. A minimum cash balance of $12,900 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% 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 (5% of sales), office salaries ($4,900 per month), and rent ($7,400 per month).

(1)

Prepare a cash receipts budget for July, August, and September.

		July	August	September
Total sales		$63,100	$80,900	$48,900
Cash sales	15%
Credit sales	85%
KELSEY
Cash Receipts Budget
For July, August, and September
		July	August	September
Cash sales
Collections of accounts receivable
Total cash receipts

(2)	Prepare a cash budget for each of the months of July, August, and September. (Negative balance and Loan repayment amount should be indicated with minus sign.)

KELSEY
Cash Budget
For July, August, and September
	July	August	September
Beginning cash balance	$13,200
Total cash available
Cash disbursements:
Total cash disbursements	0	0	0
Preliminary cash balance
Ending cash balance
Loan balance
	July	August	September
Loan balance - Beginning of month	$2,900
Additional loan (loan repayment)
Loan balance - Beginning of month