Problem 22-2A (Algo) Manufacturing: Cash budget and schedule of cash payment [The following information applies to the questions displayed below.] Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: July $ 56,500 Budgeted sales Budgeted cash payments for Direct materials Direct labor Overhead Problem 22-2A (Algo) Part 1 Sales Cash receipts from: Cash sales 15,660 3,540 19,700 Sales to customers are 20% cash and 80% on credit. Sales in June were $54,000. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $45,000 in cash and $4,500 in loans payable. A minimum cash balance of $45,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $45,000. 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 $45,000 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 ($3,500 per month), and rent ($6,000 per month). BUILT-TIGHT Schedule of Cash Receipts from Sales July $ 56,500 $ Collections of prior period sales Total cash receipts $ August $ 72,500 1. Prepare a schedule of cash receipts for the months of July, August, and September. 12,940 2,860 16,300 0 $ August 72,500 September $ 55,500 September $ 55,500 0 $ 13,260 2,940 16,700 0
Problem 22-2A (Algo) Manufacturing: Cash budget and schedule of cash payment [The following information applies to the questions displayed below.] Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: July $ 56,500 Budgeted sales Budgeted cash payments for Direct materials Direct labor Overhead Problem 22-2A (Algo) Part 1 Sales Cash receipts from: Cash sales 15,660 3,540 19,700 Sales to customers are 20% cash and 80% on credit. Sales in June were $54,000. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $45,000 in cash and $4,500 in loans payable. A minimum cash balance of $45,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $45,000. 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 $45,000 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 ($3,500 per month), and rent ($6,000 per month). BUILT-TIGHT Schedule of Cash Receipts from Sales July $ 56,500 $ Collections of prior period sales Total cash receipts $ August $ 72,500 1. Prepare a schedule of cash receipts for the months of July, August, and September. 12,940 2,860 16,300 0 $ August 72,500 September $ 55,500 September $ 55,500 0 $ 13,260 2,940 16,700 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
![Problem 22-2A (Algo) Manufacturing: Cash budget and schedule of cash payments LO P2
[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
September
$ 55,500
Budgeted sales
Budgeted cash payments for
Direct materials
Direct labor
Overhead
Problem 22-2A (Algo) Part 1
Sales
Cash receipts from:
Cash sales
July
$ 56,500
Sales to customers are 20% cash and 80% on credit. Sales in June were $54,000. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $45,000 in cash and $4,500 in loans payable.
A minimum cash balance of $45,000 is required. Loans are obtained at the end of any month when the preliminary cash
balance is below $45,000. 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 $45,000 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 ($3,500 per month), and rent ($6,000 per
month).
Collections of prior period sales
Total cash receipts
15,660
3,540
19,700
BUILT-TIGHT
Schedule of Cash Receipts from Sales
July
$
1. Prepare a schedule of cash receipts for the months of July, August, and September.
$
August
$ 72,500
12,940
2,860
16,300
56,500 $
August
72,500
0 $
September
$ 55,500
13,260
2,940
16,700
0 $
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff607cd51-3352-464f-88c2-488e70c29e78%2F860160ad-b1bc-4c27-b4a3-69c2eb310eea%2Ffg8mnj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 22-2A (Algo) Manufacturing: Cash budget and schedule of cash payments LO P2
[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
September
$ 55,500
Budgeted sales
Budgeted cash payments for
Direct materials
Direct labor
Overhead
Problem 22-2A (Algo) Part 1
Sales
Cash receipts from:
Cash sales
July
$ 56,500
Sales to customers are 20% cash and 80% on credit. Sales in June were $54,000. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $45,000 in cash and $4,500 in loans payable.
A minimum cash balance of $45,000 is required. Loans are obtained at the end of any month when the preliminary cash
balance is below $45,000. 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 $45,000 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 ($3,500 per month), and rent ($6,000 per
month).
Collections of prior period sales
Total cash receipts
15,660
3,540
19,700
BUILT-TIGHT
Schedule of Cash Receipts from Sales
July
$
1. Prepare a schedule of cash receipts for the months of July, August, and September.
$
August
$ 72,500
12,940
2,860
16,300
56,500 $
August
72,500
0 $
September
$ 55,500
13,260
2,940
16,700
0 $
0
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