Required information [The following information applies to the questions displayed below.] Built-Tight is...
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Accounting
Required information
[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
July
August
September
Budgeted sales
$ 61,000
$ 77,000
$ 51,000
Budgeted cash payments for
Direct materials
16,760
14,040
14,360
Direct labor
4,640
3,960
4,040
Overhead
20,800
17,400
17,800
Sales to customers are 30% cash and 70% on credit. Sales in June were $60,500. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $27,000 in cash and $5,600 in loans payable. A minimum cash balance of $27,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $27,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. Any preliminary cash balance above $27,000 is used to repay loans at month-end. Expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,600 per month), and rent ($7,100 per month).
2. Prepare a cash budget for the months of July, August, and September.
Note: 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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