[The following information applies to the questions displayed below] Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: Budgeted sales July $ 57,000 August $ 73,000 September $ 55,000 Budgeted cash payments for Direct materials Direct labor Overhead 15,760 3,640 19,800 13,040 2,960 16,400 13,360 3,040 16,800 Sales to customers are 20% cash and 80% on credit. Sales in June were $54,500. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $43,000 in cash and $4,600 in loans payable. A minimum cash balance of $43,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $43,000. 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 $43,000 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 ($3,600 per month), and rent ($6,100 per month). 2. Prepare a cash budget for 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.)
[The following information applies to the questions displayed below] Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: Budgeted sales July $ 57,000 August $ 73,000 September $ 55,000 Budgeted cash payments for Direct materials Direct labor Overhead 15,760 3,640 19,800 13,040 2,960 16,400 13,360 3,040 16,800 Sales to customers are 20% cash and 80% on credit. Sales in June were $54,500. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $43,000 in cash and $4,600 in loans payable. A minimum cash balance of $43,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $43,000. 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 $43,000 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 ($3,600 per month), and rent ($6,100 per month). 2. Prepare a cash budget for 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
![[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
Budgeted sales
July
$ 57,000
August
$ 73,000
September
$ 55,000
Budgeted cash payments for
Direct materials
Direct labor
Overhead
15,760
3,640
19,800
13,040
13,360
2,960
16,400
3,040
16,800
Sales to customers are 20% cash and 80% on credit. Sales in June were $54,500. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $43,000 in cash and $4,600 in loans payable.
A minimum cash balance of $43,000 is required. Loans are obtained at the end of any month when the preliminary cash
balance is below $43,000. 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 $43,000 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 ($3,600 per month), and rent ($6,100 per
month).
2. Prepare a cash budget for 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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F591c9877-1855-48a6-911e-a60e8324fb24%2Faf4b8103-9f84-40ef-9ae9-3411c1965b74%2F26t17pb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
Budgeted sales
July
$ 57,000
August
$ 73,000
September
$ 55,000
Budgeted cash payments for
Direct materials
Direct labor
Overhead
15,760
3,640
19,800
13,040
13,360
2,960
16,400
3,040
16,800
Sales to customers are 20% cash and 80% on credit. Sales in June were $54,500. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $43,000 in cash and $4,600 in loans payable.
A minimum cash balance of $43,000 is required. Loans are obtained at the end of any month when the preliminary cash
balance is below $43,000. 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 $43,000 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 ($3,600 per month), and rent ($6,100 per
month).
2. Prepare a cash budget for 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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