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Business, 26.02.2020 20:27 treyceratops1082

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 August September Sales $ 63,500 $ 80,500 $ 48,500 Cash payments for merchandise 41,400 33,100 33,900 Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $12,800 in cash; $46,600 in accounts receivable; $5,000 in accounts payable; and a $2,500 balance in loans payable. A minimum cash balance of $12,500 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% 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 (5% of sales), office salaries ($4,500 per month), and rent ($7,000 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.

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Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash pa...
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