Kelsey is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. August $ 80,900 September $ 48,900 32,700 33,500 Budgeted Sales Cash payments for merchandise purchases Sales are 20% cash and 80% on credit. Sales in June were $57,150. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $13,200 in cash and $5,900 in loans payable. A minimum cash balance of $13,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,000. Interest is 2% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and consist of sales commissions (5% of sales), office salaries ($4,900 per month), and rent ($7,400 per month). (1) Prepare a schedule of cash receipts from sales for July, August, and September. (2) Prepare a cash budget for July, August, and September. Complete this question by entering your answers in the tabs below. Required 1 Required 2 July $63,100 42,200 Prepare a schedule of cash receipts from sales for July, August, and September. Sales Cash receipts from Cash sales KELSEY Schedule of Cash Receipts from Sales July Collections of prior period sales Total cash receipts $ August 63,100 $ 80,900
Kelsey is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow. August $ 80,900 September $ 48,900 32,700 33,500 Budgeted Sales Cash payments for merchandise purchases Sales are 20% cash and 80% on credit. Sales in June were $57,150. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $13,200 in cash and $5,900 in loans payable. A minimum cash balance of $13,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,000. Interest is 2% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,000 at month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and consist of sales commissions (5% of sales), office salaries ($4,900 per month), and rent ($7,400 per month). (1) Prepare a schedule of cash receipts from sales for July, August, and September. (2) Prepare a cash budget for July, August, and September. Complete this question by entering your answers in the tabs below. Required 1 Required 2 July $63,100 42,200 Prepare a schedule of cash receipts from sales for July, August, and September. Sales Cash receipts from Cash sales KELSEY Schedule of Cash Receipts from Sales July Collections of prior period sales Total cash receipts $ August 63,100 $ 80,900
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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Transcribed Image Text:Kelsey is preparing its master budget. Budgeted sales and cash payments for merchandise purchases for the next three months follow.
August
$ 80,900
September
$ 48,900
32,700
33,500
Budgeted
Sales
Cash payments for merchandise
purchases
Sales are 20% cash and 80% on credit. Sales in June were $57,150. All credit sales are collected in the month following the sale. The
June 30 balance sheet includes balances of $13,200 in cash and $5,900 in loans payable. A minimum cash balance of $13,000 is
required. Loans are obtained at the end of any month when the preliminary cash balance is below $13,000. Interest is 2% per month
based on the beginning-of-the-month loan balance and is paid at each month-end. If a preliminary cash balance above $13,000 at
month-end exists, loans are repaid from the excess. Expenses are paid in the month incurred and consist of sales commissions (5% of
sales), office salaries ($4,900 per month), and rent ($7,400 per month).
(1) Prepare a schedule of cash receipts from sales for July, August, and September.
(2) Prepare a cash budget for July, August, and September.
Complete this question by entering your answers in the tabs below.
Required 1
July
$63,100
42,200
Required 2
Prepare a schedule of cash receipts from sales for July, August, and September.
Sales
Cash receipts from
Cash sales
KELSEY
Schedule of Cash Receipts from Sales
July
Collections of prior period sales
Total cash receipts
$ 63,100 $
< Required 1
September
80,900 $ 48,900
August
Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be
indicated with minus sign. Round your final answers to the nearest whole dollar.)
Beginning cash balance
Total cash available
Cash payments for:
Total cash payments
Preliminary cash balance.
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance - End of month
KELSEY
Cash Budget
July
Loan balance
July
$
5,900
August
August
< Required 1
September
September
Required 2
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