(a) Your answer is correct. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February CRANE COMPANY Schedule of Expected Collections from Customers For the Two Months Ending February 28, 2022 January February November 40000 0 December 76800 51200 January 144000 86400 February o 160000 Total collections 260800 297600 CRANECOMPANY Schedule of Expected Payments for Direct Materials For the Two Months Ending February 28, 2022 January February December 32000 $ January 57600 38400 February 60000 Total payments $ 89600 98400 e Textbook and Media Attempts: 1 of 5 used (b) Prepare a cash budget for January and February in columnar form. CRANE COMPANY Cash Budget January February > > > $ Crane Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. January February Sales $288,000 $320,000 Direct materials purchases 96.000 100,000 Direct labor 72,000 80,000 Manufacturing overhead 56,000 60,000 Selling and administrative expenses 63,200 68,000 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $800 of depreciation per month. Other data: 1. Credit sales: November 2021, $200,000; December 2021, $256,000. 2. Purchases of direct materials: December 2021, $80,000. 3. Other receipts: January-Collection of December 31, 2021, notes receivable $12,000; February-Proceeds from sale of securities $4,800. 4. Other disbursements: February-Payment of $4,800 cash dividend. The company's cash balance on January 1, 2022, is expected to be $48,000. The company wants to maintain a minimum cash balance of $40,000