A1 Manufacturing is preparing its master budget for the quarter ended September 30, 2015. Budgeted sales and cash payments for product costs for the quarter follow.
Sales are 20% cash and 80% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $12,900 in cash; $47,000 in accounts receivable; $5,100 in accounts payable; and a $2,600 balance in loans payable. A minimum cash balance of $12,600 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).
1. Prepare a cash receipts budget for July, August, and September.
2. Prepare a cash budget for each of the months of July, August, and September. (Round amounts to the dollar.)

  • CreatedApril 23, 2015
  • Files Included
Post your question