Problem 20-2B Manufacturing: Cash budget P2
Al Manufacturing is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.
A
B
July
$63,400
August
$80.600
D
September
$48,600
Tolone WN.
1
2 Budgeted sales
3 Budgeted cash payments for
4 Direct materials
Direct labor
6 Factory overhead
12,480
10,400
18,720
9,900
8.250
14,850
10,140
8,450
15,210
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.)

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