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Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash...

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.

July August September
Budgeted sales $ 59,500 $ 75,500 $ 52,500
Budgeted cash payments for
Direct materials 17,060 14,340 14,660
Direct labor 4,940 4,260 4,340
Factory overhead 21,100 17,700 18,100


Sales are 30% cash and 70% 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; $45,900 in accounts receivable; and a $5,900 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 ($4,900 per month), and rent ($7,400 per month).

rev: 03_17_2020_QC_CS-204679

2. Prepare a cash budget for each of 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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Answer #1
Cash Budget
July Aug Sep
Beginning balance of cash 15000 15000 19555
Cash sales collected 17850 22650 15750
Collections from Customers 45900 41650 52850
Total cash available 78750 79300 88155
Disbursement:
Material 17060 14340 14,660
Labor 4940 4260 4340
factory overheads 21100 17700 18,100
Sales commission 5950 7550 5,250
office salaries 4900 4900 4,900
Rent 7400 7400 7,400
Interest payment 59 36 0
Total cash disbursement 61409 56186 54,650
Preliminary cash balance 17,341 23,114 33,505
Additional Loan (Repayment) -2341 -3,559 0
Ending balance of cash 15,000 19,555 33,505
Loan balance:
Loan balance-Beginning 5900 3559 0
Additional loan(Repayment) -2341 -3559 0
Loan balance-Ending 3559 0 0
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