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Please help with both parts! Exercise 07-32A Merchandising: Cash budget LO P4 Kelsey is preparing its master budget for the quarter ended September 30. Budgeted
Please help with both parts!
Exercise 07-32A Merchandising: Cash budget LO P4 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 Sales Cash payments for merchandise July $62,600 43,200 August $81,400 32,200 September $49,400 33,000 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 $13,700 in cash; $50,400 in accounts receivable; $5,900 in accounts payable; and a $3,400 balance in loans payable. A minimum cash balance of $13,400 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 ($5,400 per month), and rent ($7,900 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. Required 1 Required 2 Prepare a cash receipts budget for July, August, and September. July August September Total sales $ 62,600 $ 81,400 $ 49,400 Cash sales 20% Credit sales 80% KELSE Cash Receipts Budget For July, August, and September July August September Cash sales Collections of accounts receivable Total cash receipts Prepare a cash budget for each of the months of July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) KELSEY Cash Budget For July, August, and September July August September Beginning cash balance $ 13,700 Total cash available Cash payments for: Total cash payments 0 0 0 Preliminary cash balance Ending cash balance Loan balance July August September $ 3,400 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of monthStep by Step Solution
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