Required information [The following information applies to the questions displayed below.] Built-Tight is preparing its master budget for the quarter ended September 30, 2017. Budgeted sales and cash payments for product costs for the quarter follow: July August September Budgeted sales $ 61,000 $ 77,000 $ 51,000 Budgeted cash payments for Direct materials 16,760 14,040 14,360 Direct labor 4,640 3,960 4,040 Factory overhead 20,800 17,400 17,800 Sales are 30% cash and 70% 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; $45,600 in accounts receivable; and a $5,600 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 at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,600 per month), and rent ($7,100 per month). rev: 03_17_2020_QC_CS-204679 (1) Prepare a cash receipts budget for July, August, and September.
Required information [The following information applies to the questions displayed below.] Built-Tight is preparing its master budget for the quarter ended September 30, 2017. Budgeted sales and cash payments for product costs for the quarter follow: July August September Budgeted sales $ 61,000 $ 77,000 $ 51,000 Budgeted cash payments for Direct materials 16,760 14,040 14,360 Direct labor 4,640 3,960 4,040 Factory overhead 20,800 17,400 17,800 Sales are 30% cash and 70% 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; $45,600 in accounts receivable; and a $5,600 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 at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,600 per month), and rent ($7,100 per month). rev: 03_17_2020_QC_CS-204679 (1) Prepare a cash receipts budget for July, August, and September.
Related questions
Castor, Inc. is preparing its master budget for the quarterended June 30. Budgeted sales and cash payments for merchandise forthe next three months follow: |
| April | May | June | ||||
| Budgeted sales | $ | 31,500 | $ | 40,500 | $ | 24,500 |
| Budgeted cashpayments for merchandise | 21,200 | 16,300 | 16,700 | |||
Sales are 60% cash and 40% on credit. All credit sales arecollected in the month following the sale. The March 30 balancesheet includes balances of $12,500 in cash, $12,500 in accountsreceivable, $11,000 in accounts payable, and a $2,500 balance inloans payable. A minimum cash balance of $12,500 is required. Loansare obtained at the end of any month when a cash shortage occurs.Interest is 2% per month based on the beginning of the month loanbalance and is paid at each month-end. If an excess balance of cashexists, loans are repaid at the end of the month. Operatingexpenses are paid in the month incurred and consist of salescommissions (5% of sales), shipping (4% of sales), office salaries($3,500 per month) and rent ($5,500 per month). |
Prepare a cash budget for each of the months of April, May, andJune. |
Herbal Care Corp., a distributor of herb-based sunscreens, is readyto begin its third quarter, in which peak sales occur. The companyhas requested a $93,300, 90-day loan from its bank to help meetcash requirements during the quarter. Because Herbal Care hasexperienced difficulty in paying off its loans in the past, theloan officer at the bank has asked the company to prepare a cashbudget for the quarter. In response to this request, the followingdata have been assembled: |
| a. | On July 1, the beginning of the third quarter, the company willhave a cash balance of $39,000. |
| b. | Actual sales for the last two months and budgeted sales for thethird quarter follow (all sales are on account): |
| May (actual) | $230,000 |
| June (actual) | $270,000 |
| July (budgeted) | $450,000 |
| August (budgeted) | $760,000 |
| September (budgeted) | $320,000 |
Past experience shows that 25% of a month%u2019s sales arecollected in the month of sale, 69% in the month following sale,and 1% in the second month following sale. The remainder isuncollectible. |
| c. | Budgeted merchandise purchases and budgeted expenses for the thirdquarter are given below: |
| July | August | September | |
| Merchandise purchases | $230,000 | $346,000 | $169,000 |
| Salaries and wages | $49,000 | $32,000 | $26,000 |
| Advertising | $143,000 | $131,000 | $62,000 |
| Rent payments | $8,600 | $7,200 | $7,800 |
| Depreciation | $8,800 | $9,700 | $8,500 |
Merchandise purchases are paid in full during the month followingpurchase. Accounts payable for merchandise purchases on June 30,which will be paid during July, total $213,000. |
| d. | Equipment costing $8,800 will be purchased for cash duringJuly. |
| e. | In preparing the cash budget, assume that the $93,300 loan will bemade in July and repaid in September. Interest on the loan willtotal $1,060. |
| Requirement 1: |
Prepare a schedule of expected cash collections for July, August,and September and for the quarter in total. (Leave no cells blank - be certain to enter "0" wherever required.Omit the "$" sign in your response) |
| Month | ||||
| July | August | September | Quarter | |
| From accounts receivable: | ||||
| May sales | $ | $ | $ | $ |
| June sales | ||||
| From budgeted sales: | ||||
| July sales | ||||
| August sales | ||||
| September sales | ||||
| Total cash collections | $ | $ | $ | $ |
Edwards Company has projected sales and production in units forthe second quarter of the coming year as follows: |
| April | May | June | |
| Sales | 20,000 | 10,000 | 15,000 |
| Production | 15,000 | 15,000 | 20,000 |
| Required: |
| a. | Cash-related production costs are budgeted at $7 per unitproduced. Of these production costs, 25% are paid in the month inwhich they are incurred and the balance in the following month.Selling and administrative expenses (all paid in cash) will amountto $70,000 per month. The accounts payable balance on March 31totals $77,000, all of which will be paid in April. Prepare aschedule for each month showing budgeted cash disbursements forEdwards Company. (Omit the "$" sign in yourresponse.) |
| April | May | June | |
| Production cost | $ | $ | $ |
| Cashdisbursement: | |||
| Production thismonth | |||
| Production priormonth | |||
| Selling andadministration | |||
| Totaldisbursement | $ | $ | $ |
| b. | Assume that all units are sold on account for $19 each. Cashcollections from sales are budgeted at 60% in the month of sale,30% in the month following the month of sale and the remaining 10%in the second month following the month of sale. Accountsreceivable on April 1 totaled $168,000 ($38,000 from February'ssales and the remainder from March sales.) Prepare a schedule foreach month showing budgeted cash receipts for Edwards Company.(Omit the "$" sign in your response.) |
| April | May | June | |
| Total sales | $ | $ | $ |
| Cash receipts: | |||
| February sales | |||
| March sales | |||
| April sales | |||
| May sales | |||
| June sales | |||
| Total receipts | $ | $ | $ |
