3.

Martin Company expects to have a cash balance of $136,500 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows: Collections from customers: January $243,200, February $430,900. Payments for direct materials: January $154,400, February $236,400 Direct labor: January $89,700, February $136,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $62,400, February $74,900. These costs include depreciation of $5,000 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $44.300. February $59,300. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $36,200 in cash. Martin Company has a line of credit at the local bank that enables it to borrow up to $74,200. The company wants to maintain a minimum monthly cash balance of $59,700. Prepare a cash budget for January and February Martin Company Cash Budget For the Months Ending February 2020 January February