FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Built-Tight is preparing its master budget. Budgeted sales and cash pryments follow:
Budgeted sales
July
$ 56,000
August
$ 72,000
Budgeted cash payments for
Direct materials
Direct labor
Overhead
15,560
3,440
19,600
12,840
2,760
16,200
September
$ 56,000
13,160
2,840
16,600
Sales to customers are 20% cash and 80% on credit. Sales in June were $53,500. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $47,000 in cash and $4,400 in loans
payable. A minimum cash balance of $47,000 is required. Loans are obtained at the end of any month when the
preliminary cash balance is below $47,000. Interest is 1% per month based on the beginning-of-the-month loan
balance and is paid at each month-end. Any preliminary cash balance above $47,000 is used to repay loans at
month-end. Expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries
($3,400 per month), and rent ($5,900 per month).
2. Prepare a cash budget for the months of July, August, and September. (Negative balances and Loan repayment amounts (if any)
should be indicated with minus sign. Enter your final answers in whole dollars.)](https://content.bartleby.com/qna-images/question/23949d3e-50b2-478c-a26c-00f434d27e15/4263b26e-ae29-4906-8957-63ad830c2ee7/bgr3i2n_processed.jpeg)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash pryments follow:
Budgeted sales
July
$ 56,000
August
$ 72,000
Budgeted cash payments for
Direct materials
Direct labor
Overhead
15,560
3,440
19,600
12,840
2,760
16,200
September
$ 56,000
13,160
2,840
16,600
Sales to customers are 20% cash and 80% on credit. Sales in June were $53,500. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $47,000 in cash and $4,400 in loans
payable. A minimum cash balance of $47,000 is required. Loans are obtained at the end of any month when the
preliminary cash balance is below $47,000. Interest is 1% per month based on the beginning-of-the-month loan
balance and is paid at each month-end. Any preliminary cash balance above $47,000 is used to repay loans at
month-end. Expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries
($3,400 per month), and rent ($5,900 per month).
2. Prepare a cash budget for the months of July, August, and September. (Negative balances and Loan repayment amounts (if any)
should be indicated with minus sign. Enter your final answers in whole dollars.)
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