Question

Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow. Budgeted July 562,450 43.600 August $81,500 32.009 September $49,609 3 2.30 Cash payments for nerchandise 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 $13.900 in cash, $51,100 in accounts receivable; $6,100 in accounts payable, and a $3,600 balance in loans payable. A minimum cash balance of $13.600 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 ($5.600 per month and rent ($8,100 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 Complete this question by entering your answers in the tabs below. Regardi Required 2 Prepare a cash receipts budget for July, August, and September July August September $ 2,400 S 81,600 $ 19.000 20% 12,4001 s 16.3207$ 9,020 Total Sales Pey

Answer 1

1. Cash receipts budget

	July	August	September
Total sales	$62,400	$81,600	$49,600
Cash sales	12,480	16,320	9,920
Credit sales	49,920	65,280	39,680
Cash sales	12,480	16,320	9,920
Collections of accounts receivable	51,100	49,920	65,280
Total cash receipts	$63,580	$66,240	$75,200

2. Cash Budget

	July	August	September
Beginning cash balance	$13,900	$13,600	$220,37
Cash sales	12,480	16,320	9,920
Collections from accounts receivable	51,100	49,920	65,280
Total cash available	77,480	79,840	97,237
Cash disbursements
Payment for merchandise	43,600	32,000	32,800
Sales commission	6,240	8,160	4,960
Office salaries	5,600	5,600	5,600
Rent	8,100	8,100	8,100
Interest on Bank loan	36	39	-
Total cash disbursements	63,576	53,899	51,460
Preliminary cash balance	$13,904	$25,941	$45,777
Additional loan	304	(3,904)	-
Ending cash balance	$13,600	$22,037	$45,777

Loan balance

	July	August	September
Loan balance	$3,600	$3,904	$0
Additional loan	$304	($3,904)	$0
Loan balance	$3,904	$0	$0

July beginning cash balance included on outstanding loan payable of $3,600

Interest on bank loan = $3,600×1%=$36

Interest on bank loan for August = $3,904×1% = $39.

Note: Payment for merchandise for August and September is not clarity so, for the month of August taken as $32,000 and for September is $32,800.

If any changes is there, please comment below. I'll change the answer based on the values you have given.

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