Operating expenses, If an excess balance of cash exists,

Operating expenses

Assignment Help Financial Accounting

Reference no: EM13914279

Built-Tight is preparing its master budget for the quarter ended September 30, 2015. Budgeted sales and cash payments for product costs for the quarter follow:

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.

Reference no: EM13914279

Questions Cloud

Discussions this week : Some common sense talking points are moving around in our discussions this week. As always there are very solid themes coming to the forefront. Ben McClure writes for Investigator, and I think some of his ideas here are valuable to this discussion.

Child care payments : Susan Beale is a single mother with two children, ages three and six. She pays a total of $7,000 each year to a neighbour to care for her children while she works. Assuming that Susan files as a head of household, how should she report the child car..

Expensive areas by keeping rents artificially : Price ceilings have been used to help renters in expensive areas by keeping rents artificially low. Though this helps some renters, there are costs associated with this practice too.An increased emphasis on informal connections in allocating apartmen..

Prepare a merchandise purchases budget : Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.

Operating expenses : 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).

Alpha company normally sells its product : Alpha Company normally sells its product for $20 per unit. It just received a large order from a new customer at a selling price of $16 per unit.

New customer at a selling price : Alpha Company normally sells its product for $20 per unit. It just received a large order from a new customer at a selling price of $16 per unit.

Degree of operating leverage : Compute the degree of operating leverage before and after the purchase of the new equipment and interpret your results

Statement of cash flows : explain if the statement of cash flows shows the profitability of the company

User Account

All Pages