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. Built-Tight is preparing its master budget for the quarter ended September 30. Budgetedsales and cash payments for product costs for the quarter follow.ABCD1July$64,000August$80,000September$48,0002 Budgeted sales| 3 Budgeted cash payments forDirect materialsDirect laborFactory overhead416,1604,04020,20013,4403,36016,80013,7603,44017,200Sales are 20% cash and 80% on credit. All credit sales are collected in the monthfollowing 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 inloans payable. A minimum cash balance of $15,000 is required. Loans are obtained at theend of any month when a cash shortage occurs. Interest is 1% per month based on thebeginning-of-the-month loan balance and is paid at each month-end. If an excess balanceof cash exists, loans are repaid at the end of the month. Operating expenses are paid in56 the month incurred and consist of sales commissions (10% of sales), office salaries($4,000 per month), and rent ($6,500 per month).Prepare a cash budget for each of the months of July, August, and September. (Roundamounts to the dollar.)Please explain your work in detail and provide in-text citations. Include the initial situationand the initial assumptions in your answer. At least 5 references are required amongwhich one should be the textbook as the source of the data.

Cash Budget The purpose of preparing the cash budget to know the estimation of the total cash…

Answered: Built-Tight is preparing its master…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please add detail explanation for all calculation. 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. **attached image chart -Budgeted Sales on July $64,000 / August $80,000 / September $48,000 -Budgeted Cash Payments for Direct Materials on July $16,160 / August $13,440 / September $13,760 Direct Labor on July $4,040 / August $3,360 / September $3,440 Factory Overhead on July $20,200 / August $16,800 / September $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…
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