Built-Tight 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 $15,000 in cash; $45,000 in accounts receivable; $4,500 in accounts payable; and a $5,000 balance in loans payable. A minimum cash balance of $15,000 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 ($4,000 per month), and rent ($6,500 per month).
Prepare a cash budget for each of the months of July, August, and September. (Round amounts to the dollar.)
Please explain your work in detail and provide in-text citations. Include the initial situation and the initial assumptions in your answer. At least 5 references are required among which one should be the textbook as the source of the data.
*Please refer to the Grading Criteria for Professional Assignments in the University Policies for specific guidelines and expectations.
1. Paper needs to be formatted in APA 7th edition
2. Explain your work in detail and provide in-text citation.
3. Include the initial situation and the initial assumption in your answer.
4. Need to have at least 6 peer-reviewed articles as the references (Recommend to find the articles from proquest.
5. Need to include textbook as the references.
6. Please find the textbook and class PPTs in the attachment section.
7. Please find the example of the calculation for July in the attached screenshot “PA 2 Calculation Sample”
8. Please find the image of “Budgeted sales and cash payments for product costs for the quarter” in the attached.