3. Nunez Company expects to have a cash balance of $45,000 on January 1, 2019. Relevant monthly budget data for the first two months of 2019 are as follows:

Collections from customers: January $100,000, February $160,000

Payments to suppliers: January $60,000, February $80,000

Direct labour: January $30,000, February $45,000. Wages are paid in the month they are incurred

Manufacturing overhead: January $26,000, February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $15,000, February $20,000. These costs are paid as incurred

Sales of marketable securities in January are expected to realize $10,000 in cash

Nunez Company has a line of credit at a local bank. It can borrow up to $25,000. The company wants to keep a minimum monthly cash balance of $25,000.

Prepare a cash budget for January and February.

JANUARY FEBRUARY 2 MONTHS

Beginning cash balance

Add:

Add:

Total cash available

Less: cash disbursements

Total cash disbursements

Excess (deficiency) of collections over disbursements

Financing:

Borrowing

Repayments

Total financing

Ending Cash balance