Required information Problem 22-2A Manufacturing: Cash budget LO P2 [The followi

Question

Required information Problem 22-2A Manufacturing: Cash budget LO P2 [The following information applies to the questions displayed belowJ 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 $63,000 $79,000 49,000 Direct materials Direct labor Factory overhead 16,360 13,640 13,960 3,640 20,400 17,000 17,400 4,240 3,560 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: $45,200 in accounts receivable $4,700 in accounts payable; and a $5,200 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 ($4,200 per month), and rent ($6,700 per month). Problem 22-2A Part 1 (1) Prepare a cash receipts budget for July, August, and September. BUILT-TIGHT Cash Receipts Budget For July, August, and September Jul August September Less: ending accounts receivable Cash receipts from: Total cash receipts

Explanation / Answer

*75% of Sales

BUILT TIGHT Cash Receipts Budget For July, August and September July August September Sales            63,000         79,000          49,000 Less: Ending accounts receivable*            47,250         59,250          36,750 Cash receipts from: Cash Sales            15,750         19,750          12,250 Prior Month cash collection            45,200         47,250          59,250 Total Cash Receipts            60,950         67,000          71,500

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