Prepare a cash budget for each of the months of july

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Reference no: EM132660356

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.

A	6	C	D
	July	August	September
Budgeted sales	$64,000	80,000	$48,000
Budgeted cash payments for
Direct materials	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200

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).

Problem 1: Prepare a cash budget for each of the months of July, August, and September. (Round amounts to the dollar.)

Reference no: EM132660356

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