I’m stuck on a Accounting question and need an explanation.
A1 Manufacturing is preparing its master budget for the quarter ended September 30. 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.)5
Plagarism – Under 15% is accepted.
Format – APA
Deadline – 18 Feb 2020, 8PM CST.
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