Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. Built-Tight is preparing its master budget for the quarter ended September 30, 2017. Budgeted sales and cash payments for product costs for the quarter follow: July August September Budgeted sales Budgeted cash payments for 64,000 $80,000 48,000 Direct materials Direct labor Factory overhead 16,16013,440 13,760 3,440 20,200 16,80017,200 4,040 3,360 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).

Explanation / Answer

Answer 1 BUILT - TIGHT Cash Receipts Budget For July,August and September July August September Budgeted Sales $64,000 $80,000 $48,000 Less : Ending Accounts Receivables $51,200 $64,000 $38,400 Cash Receipts from Cash Sales $12,800 $16,000 $9,600 Credit Sales $45,000 $51,200 $64,000 Total Cash Receipts $57,800 $67,200 $73,600 Answer 2 BUILT - TIGHT Cash Budget For July,August and September July August September Beginning Cash balance $15,000 $15,000 $25,505 Cash Receipts $57,800 $67,200 $73,600 Total Cash Available $72,800 $82,200 $99,105 Cash Payment for Direct Material $16,160 $13,440 $13,760 Direct Labour $4,040 $3,360 $3,440 Factory Overhead $20,200 $16,800 $17,200 Sales Commission $6,400 $8,000 $4,800 Office Salaries $4,000 $4,000 $4,000 Rent $6,500 $6,500 $6,500 Interest on Loan $50 $46 Total Cash payments $57,350 $52,146 $49,700 Preliminary Cash balance $15,450 $30,055 $49,405 Additional Loan (loan repayment) -$450 -$4,550 $0 Ending Cash balance $15,000 $25,505 $49,405 Loan balance July August September Loan balance - Beginning of month $5,000 $4,550 $0 Additional Loan (loan repayment) -$450 -$4,550 $0 Loan balance - End of month $4,550 $0 $0

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.