[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 $ 61,500 August $ 77,500 Budgeted cash payments for Direct materials Direct labor Overhead 16,660 4,540 20,700 13,940 3,860 17,300 September $ 50,500 14,260 3,940 17,700 Sales to customers are 25% cash and 75% on credit. Sales in June were $60,000. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $25,000 in cash and $5,500 in loans payable. A minimum cash balance of $25,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $25,000. 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 $25,000 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 ($4,500 per month), and rent ($7,000 per month). Problem 20-2A (Algo) Part 2 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. > Answer is complete but not entirely correct. BUILT-TIGHT Cash Budget July August September Beginning cash balance $ 15,000 $ 16,270 x $ 23,148 X Add: Cash receipts 60,875 65,500 Total cash available 75,875 81,770 70,750 93,898 Less: Cash payments for Direct materials 16,660 13,940 14,260 Direct labor 4,540 3,860 3,940 Overhead 20,700 ✓ 17,300 17,700 Sales commissions 6,150 7,750 5,050 Office salaries 4,500 4,500 4,500 ✓ Rent 7,000 7,000 7,000 Interest on loan 55 42 × Total cash payments 59,605 54,392 52,450 Preliminary cash balance 16,270 x 27,378 41,448 x Loan activity Additional loan Repayment of loan to bank (1,270) (4,230) Ending cash balance 15,000 23,148 41,448 Loan balance July August September Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ 5,500 $ 4,230 $ 0 (1,270) (4,230) $ 4,230 $ 0 $ 0