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1.)Babylon lce Cream, a producer of aairy prouucio, piopar budgets. Relevant data from assumed operating budgets for 2014 are: February $412,000 210,000 85,000 80,000 100,000
1.)Babylon lce Cream, a producer of aairy prouucio, piopar budgets. Relevant data from assumed operating budgets for 2014 are: February $412,000 210,000 85,000 80,000 100,000 January $460,000 185,000 70,000 70,000 95,000 Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Collections are expected to be 75% in the month of sale, and 25% in the month following sale. Babylon pays 60% of direct materials purchases in cash in the month of purchase, and the balance due in the month following the purchase. All other items above are paid in the month incurred. Depreciation in the manufacturing overhead budget is 20,000 in January and 15,000 in February Depreciation in the selling and administrative expenses budget is 10,000 in January and 5,000 in February. Other data: (1) Sales: December 2013, $320,000 (2) Purchases of direct materials: December 2013, $175,000 (3) Other receipts: January--Donation received, $2,000 February-Sale of used equipment, $4,000 (4) Other disbursements: February-Purchased equipment, $10,000 (5) Repaid debt: January, $30,000 The company's cash balance on January 1, 2014, is expected to be $50,000. The company wants to maintain a minimum cash balance of $45,000. Prepare a cash budget for January and February in columnar form. (26 points)
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