Built-Tight is preparing its master budget. Budgeted sales and cash payments follow:
Budgeted sales
July
$ 60,000
August
$ 76,000
September
$ 52,000
Budgeted cash payments for
Direct materials
16,960
14,240
14,560
Direct labor
4,840
4,160
4,240
Overhead
21,000
17,600
18,000
Sales to customers are 30% cash and 70% on credit. Sales in June were $62,000. All credit sales are collected in the
month following the sale. The June 30 balance sheet includes balances of $31,000 in cash and $5,800 in loans payable. A
minimum cash balance of $31,000 is required. Loans are obtained at the end of any month when the preliminary cash
balance is below $31,000. 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 $31,000 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 ($4,800 per month), and rent ($7,300 per
month).
1. Prepare a schedule of cash receipts for the months of July, August, and September.
BUILT-TIGHT
Schedule of Cash Receipts from Sales
July
August September
$ 60,000 $ 76,000 $ 52,000
