Required information

Skip to question

[The following information applies to the questions displayed below.] Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.

	July			August			September
Budgeted sales	$	63,500		$	79,500		$	48,500
Budgeted cash payments for
Direct materials		16,260			13,540			13,860
Direct labor		4,140			3,460			3,540
Factory overhead		20,300			16,900			17,300

Sales are 25% cash and 75% 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; $45,100 in accounts receivable; and a $5,100 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 ($4,100 per month), and rent ($6,600 per month).

rev: 03_17_2020_QC_CS-204679

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